This is Ngāti Whātua come to support your AGM. So we hope that the year was a good year for you all, a good year for our town and our city, a good year for our community. We thank you all on behalf of our community for the support you give, and we come here to support your AGM this year. All the best from Ngāti Whātua. Tēnā koutou. Tēnā kia tau. Tēnā koutou. Kia ora koutou katoa.
Right. Kia ora katoa. Good morning, ladies and gentlemen. I am Julian Cook, the Chair of SkyCity, and it is my pleasure to welcome shareholders and bondholders to the 2023 SkyCity Annual Meeting. Thank you for joining us in person and online today and showing your interest in today's proceedings. It is pleasing to see so many of you here in the Auckland SkyCity Theatre today. For those attending in person, in the event of an emergency, please remain calm and follow the instructions of our theatre ushers and the SkyCity security officers. They will direct us to the nearest emergency exits. Moving to the order of business for today, I declare the 29th annual meeting of SkyCity open and confirm that the meeting has been duly convened with a quorum present. Firstly, some administrative matters for those attending virtually today.
Instructions on how to participate are set out in the notice of meeting previously sent to shareholders and bondholders, and the virtual meeting guide available on Computershare's meeting platform. Audio will stream through your selected device, so please ensure that the volume control on your headphones or device is turned up. Shareholders can ask questions and vote on the resolutions to be put to shareholders on their selected devices. However, bondholders who are not also shareholders are not entitled to vote on the resolutions or ask questions on their selected devices. Shareholders can submit questions on their selected devices at any time. To ask a question, simply select the Q&A tab, type your question into the box at the bottom of the screen, and press Send.
If your question relates to one of the formal resolutions set out in the notice of meeting, please note in your question which resolution your question relates to. While shareholders can submit questions on their selected devices from now, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or, if we receive multiple questions on one topic, amalgamated together. Due to time constraints, we may not be able to answer all of your questions. The Q&A tab on your selected device can also be used if you require assistance. Submit your query in the same manner as typing a question, and a Computershare representative will respond to you directly. Alternatively, you can call Computershare on the number on screen. Voting today will be conducted by way of poll on all items of business.
Online voting will open shortly for all resolutions. If you are eligible to vote at this meeting, then resolutions and voting options will appear on your screen at that time. To vote, simply select your voting direction from the options shown on screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the green tick appears. To change your vote, select Change Your Vote at any time before I declare voting closed. I now declare voting open online for all items of business. Please submit your votes at any time. I will give you a warning before I move to close voting. In the event you experience any technological issues, a recording of today's meeting will also be available on the company's website following the meeting.
The minutes of the 2022 SkyCity Annual Meeting, last held on the 28th of October last year, have been posted on the company's website and are held by the Company Secretary. These minutes are available for inspection by any shareholder or bondholder, should they wish to. I will now introduce the SkyCity Board and management in attendance in the SkyCity Theatre today. In attendance to my left are Michael Ahearne, SkyCity's Chief Executive Officer, Jo Wong, SkyCity's General Counsel and Company Secretary, Kate Hughes, Chad Barton, Glenn Davis, David Attenborough, and Donna Cooper. In attendance also is Richard Day, our Lead Audit Partner from PricewaterhouseCoopers. The business of the meeting today is as set out in the notice of the meeting. Firstly, I will present my Chair's address.
SkyCity's Chief Executive Officer, Michael Ahearne, will then summarize SkyCity's performance during the past financial year and provide an update on current trading. After that, we will hear from the Chairs of the Risk and Compliance Committee, Audit Committee, and People and Culture Committee, as well as the Chair of the SkyCity Adelaide Board. We will then move to the previously notified resolutions for consideration by the meeting, including any questions and a discussion in respect of those resolutions. A general question and answer session will then follow on matters relating to the management and operations of the company. Please note that in the notice of meeting, this general question and answer session was scheduled to occur prior to considering these resolutions. Finally, at the close of the meeting, those attending in person today are invited to join directors and management for refreshments in the theater foyer.
So, turning to my address. The past financial year has been another busy time for SkyCity as we continue to navigate a number of industry and regulatory issues. Offsetting, offsetting this has been the return to performance of the underlying business with our first full financial year, without any COVID-related impacts since 2019. Firstly, I would like to acknowledge the work of our current Chief Executive Officer, Michael Ahearne. As you will be aware, Michael tendered his resignation last week, following three years as Chief Executive Officer and a total of six with the company. Michael has led the business through a very complex and demanding period and has worked very hard to set a platform for the business going forwards. Michael will make some further comments on his resignation in his address shortly...
Michael has given us 6 months' notice, and the board is underway with the search for a successor, which will include internal and external candidates. Progress has continued on the renewal of the SkyCity board, with 2 new non-executive directors appointed during 2023. We now have a whole new board compared to 2 years ago. David Attenborough was appointed to the board in March of 2023. David brings significant gaming sector experience, with over 12 years' experience at ASX-listed Tabcorp Holdings as Chief Executive Officer and Managing Director. Last month, Donna Cooper was appointed to the board. Donna has over 25 years' experience in the financial services industry, most recently as Chief Executive Officer of TSB Bank, where she had a particularly strong focus on introducing stronger anti-money laundering controls and improving the risk culture there. Both new directors will address the meeting later.
Stepping down from the board at the close of the annual meeting today is Sue Suckling. I would like to acknowledge Sue's contribution. Sue has been on the SkyCity board for 12 years and has been a great advocate for diversity and inclusivity and sustainability, and has played an important part in our community trusts. The past 3 years have been difficult for the business, and Sue has given her full commitment through this time and provided valued continuity while the board refresh has been undertaken. As we have previously signaled, the board intends to appoint a seventh non-executive director over the coming financial year to complement the current mix of skills and experience. A key board focus, which I talked about last year, has been to strengthen governance across key risk areas, particularly financial crime prevention and host responsibility.
A dedicated Risk and Compliance Committee was established in August 2022, and independent non-executive directors were appointed to the separate SkyCity Adelaide board in September 2022. These governance groups have been operating effectively and are a key mechanism for directing and governing the compliance enhancement programs we have in place in Adelaide and across the wider group. The board and management recognize the critical importance of protecting our casino licenses and enhancing our social license to operate, and we remain committed to providing safe and responsible experiences and environments for our people and customers. Over the past financial year, we have seen a continuation of the heightened regulatory scrutiny that has become a significant feature of our industry.
On the seventh of December, 2022, AUSTRAC filed civil penalty proceedings in the Federal Court of Australia against SkyCity Adelaide, alleging contraventions under the Australian Anti-Money Laundering and Counter-Terrorism Financing Act. In August of 2023, we booked an AUD 45 million provision for a potential AUSTRAC civil penalty and associated legal costs. I would note that considerable uncertainty remains regarding the amount of any civil penalty SkyCity Adelaide may be required to pay, and any eventual civil penalties may differ materially from the amount provisioned. It is likely that any resolution with AUSTRAC would involve SkyCity admitting serious breaches of the AML/CTF Act and a material fine. As these proceedings remain underway, there is limited further information I can provide at this time, but we are hopeful of reaching a resolution to the proceedings.
In the past financial year, the South Australian Gaming Regulator, CBS, initiated an independent review into the suitability of SkyCity Adelaide to continue to hold the Adelaide casino license. This process was put on hold by CBS in February this year, pending the resolution of the AUSTRAC proceedings. Recently, at CBS's direction, SkyCity Adelaide appointed an independent expert to review and monitor the implementation of the AML/CTF and host responsibility enhancement programs underway at SkyCity Adelaide. The independent expert appointed is Kroll, a firm with experience in financial crime and independent expert reviews at other Australian casinos. We are acutely aware and very disappointed that in Adelaide, we have not met the standards to which we need to hold ourselves. This has resulted in the action by AUSTRAC and CBS.
Since late 2021, we have had in place a large-scale enhancement program in Adelaide to uplift our financial crime program and capabilities. This has involved significant resource and financial investment. Work has progressed well, but there is still more to do. In September 2023, the New Zealand Department of Internal Affairs made an application to the Gambling Commission to temporarily suspend SkyCity's casino operator's license in New Zealand for a period in the range of 10 days. The application follows a complaint made in February 2022 to the department by a former customer who gambled at our Auckland casino between 2017 and 2022, sorry, 2021.
The application and SkyCity's initial submissions are currently before the Gambling Commission, who will timetable a hearing and consider whether to make an order to suspend our New Zealand casino operator's license, and if so, the duration of any such suspension. A decision may be months away. In responding to the department, we identified an issue with regards to one component of a system that monitors long periods of play, which was disappointing, to say the least. We have rectified this issue. We have also made significant investments in people and technology as part of our Host Responsibility program over the years. We will continue to do so, as it is critical we can be confident in our systems in this area.
You will note that a large part of my address thus far has been taken up with regulatory issues and our programs of work to address our compliance systems and correct historical shortcomings. This reflects the focus of the board and the management team, and indeed, will be a focus for the business over the coming years. Over the last financial year, we have seen good progress in the implementation of the Adelaide AML/CTF enhancement program, improvements in our Auckland Host Responsibility program, the appointment of a new Chief Risk Officer, and the first full year of operation of the board's Risk and Compliance Committee. However, shareholders should be cognizant that this is a multi-year period of work ahead of the business, which will require continued focus, time, and investment.
This will be a key deliverable of the new Chief Executive Officer to be appointed following Michael's departure. You will shortly hear from Carolyn Kidd, SkyCity's Chief Risk Officer, on some of our initiatives in these areas. We were pleased to be able to declare a final dividend of NZD 0.06 per share off the back of the group's strong FY 2023 financial performance. This takes the full year dividend for FY 2023 to NZD 0.12 per share. The board took a prudent approach in determining the level of dividend payable, reflecting the strength of the group's balance sheet, which includes a healthy level of liquidity, but which will also allow us to manage our future potential commitments, including the repurchase of the Auckland car park concession and a potential AUSTRAC fine.
This is reflected in the dividend payout being 65% of net profit after tax, towards the lower end of our allowable range. The board remains committed to maintaining an investment-grade credit rating whilst paying out a sustainable dividend to shareholders. As we resolve some of the current short-term challenges and see improvement in the underlying earnings and cash flows of the group, we would expect to be able to pay higher dividends. A significant number of events are due to take place in FY 2024, including the opening of the new Horizon Hotel in Auckland, which will be over the road, and the reintegration of the car park operations. We are currently preparing for the opening of the New Zealand International Convention Centre in 2025.
Online gaming remains a key strategic growth opportunity for SkyCity, and policy announcements made by the National Party ahead of the general election regarding the proposed regulation of New Zealand online gaming are very encouraging. We believe these changes would provide significantly improved harm minimization protection for customers, plus a new revenue stream for the New Zealand government that is currently not being collected. Work done by SkyCity suggests the New Zealand online gaming sector represents a very significant market opportunity. SkyCity is planning our response to this initiative, as well as supporting the industry to meet the necessary responsible gaming elements that will be essential in any regulatory framework.
While the workload on regulatory issues is high at the moment, this will be dealt with over time, and the developments around the New Zealand International Convention Centre and online gaming mean that the growth prospects for SkyCity are positive. The board is committed to realizing these opportunities to the benefit of shareholders. I would like to thank shareholders and bondholders for their ongoing support as we look forward to an exciting future, and a big thank you to our staff and customers who continue to support us. I now invite Chief Executive Officer, Michael Ahearne, to summarize SkyCity's performance during the past financial year and to provide an update on current trading.
Thank you, Julian. Kia ora, and good morning, everyone, and welcome to our 2023 annual meeting. It's great to see people back here physically, and special welcome to also those online. But it's great to be actually able to have these meetings on a physical basis and talk directly to our shareholders. As you'll be aware, I've notified the board of my intention to step down as Chief Executive Officer at the end of March 2024. I've decided the time has come for me and my family to return to Europe. It has been a real privilege to lead SkyCity Entertainment Group over the last years, particularly through the challenges of COVID, leading enhancements in our capabilities in customer care, and establishing SkyCity's online strategy.
I'm particularly proud of the improvements we've made throughout the business to enhance our host responsibility and anti-money laundering and counter-terrorism financing capabilities. This work is ongoing as we are committed to continuously improving our capabilities in these areas. As Julian mentioned, over the last financial year, there has been continued increased regulatory scrutiny of the gaming sector in both New Zealand and Australia, which has significantly increased the risk profile of our industry. We recognize this increased scrutiny is now a permanent feature, and to manage and mitigate this heightened level of risk, we have a continuous improvement mindset to ensure SkyCity provides safe and responsible gaming and hospitality experiences and environments for its people and customers. Across the group, over FY 2023, we have further enhanced and invested in our internal AML, CFT, and host responsibility resourcing, capability, processes, and systems.
These enhancements have increased the underlying cost base, but it is essential that these areas of our business are resourced appropriately. In FY 23, one-off and ongoing group compliance costs totaled approximately NZD 18 million, and we ended the year with over 80 staff employed in these roles, which is close to triple the amount of three years ago. We are continuing to explore available technology solutions where possible to improve our ability to prevent and minimize harm from problem gambling. For example, mandatory card play is likely to be a requirement of our casino operations in the future, and we're actively investigating options to implement this across all of our properties.... The Department of Internal Affairs' application to temporarily suspend SkyCity's casino operator's license in New Zealand is currently before the Gambling Commission for hearing and determination, as outlined by Julian.
SkyCity has implemented since 2022 several significant enhancements to our facial recognition technology systems on the Auckland and Hamilton gaming floors to monitor for continuous presence and continuous play for both carded and uncarded players. We believe this enhancement, in addition to a range of other host responsibility measures, will assist us to better detect incidents of continuous play by customers. We are continuing to work constructively with AUSTRAC in relation to the civil penalty proceedings filed against SkyCity Adelaide in December of 2022, with a view to coming to an agreed position to be put to the court, if possible, or at least significantly narrowing the issues.
The SkyCity Adelaide team is also working closely with Kroll, the independent expert recently appointed to review SkyCity Adelaide's AML/CTF and host responsibility enhancement programs, and report back to the South Australian Liquor and Gambling Commissioner on the implementation of those programs, and SkyCity Adelaide's compliance with its AML/CTF and gambling harm minimization obligations. Now, we're gonna hear from Carolyn Kidd, our recently appointed Chief Risk Officer, about some of the enhancements we've made in these areas.
Hi, everyone. I'm Carolyn Kidd, Chief Risk Officer at SkyCity. My role here is new to the company in 2023, and one that signals SkyCity's absolute commitment to driving continuous improvement in the way we care for our customers, our communities, and our business. At the heart of SkyCity's strategy, we promise to uphold responsible, ethical business practices and, importantly, do what's right. SkyCity is focused on creating and investing in a culture of compliance that's hardwired into all of our practices and policies, all of our training, and all of our monitoring. Each year, we continue to invest in our people and processes as we continually strengthen our compliance environment. SkyCity is committed to ensuring our guests enjoy a safe and responsible gaming environment. We take our responsibilities as a host very seriously.
We have a dedicated team of experienced host responsibility specialists at each of SkyCity's land-based casinos, and through our partnership with GiG, an experienced harm minimization team is in place for the SkyCity online casino. Over the last financial year, we established a new team of responsible gaming hosts in Auckland and Hamilton, who provide additional and dedicated host responsibility coverage in gaming areas. In addition to increasing our resources, we are continuing to invest in technology, including facial recognition, to monitor a variety of customer activity and identify potential indicators of gambling harm. We know the impact that financial crime can have on our communities, so we are determined to detect and deter financial crime across our business.
To do this, we have specialist financial crime teams who oversee SkyCity's compliance with anti-money laundering and counter-funding of terrorism requirements in both New Zealand and Australia, and provide support and guidance to our frontline teams. We remain determined to maintain a safe and responsible gaming environment by playing our part across the business to tackle financial crime. Our commitment to continuously improve our approach to both host responsibility and financial crime is a key priority for SkyCity, and we will continue to commit investment and additional resources in these areas going forward. We have come a long way, and we know we have a lot more to do to meet our current challenges and new ones that will no doubt emerge. To support our efforts, SkyCity have started work to enhance and further mature our approach to risk management and strengthen our risk management framework.
We know that continuous improvement means just that. It doesn't stop, and we must always aim to get better and be better.
Thank you, Carolyn. Turning now to our results, and I'm really pleased to report a strong recovery in earnings achieved for the group in FY 23. After three years of significant disruptions to SkyCity operations, our normalized earnings for the financial year ended 30 June 2023 were back above pre-COVID-19 levels on a like-for-like basis. Group normalized earnings before interest, taxes, depreciation, and amortization of NZD 310 million was up 125% on the prior year, and the group reported EBITDA of NZD 165.9 million was up 71% on the prior year. Group reported NPAT of NZD 8 million compares to a loss of NZD 33.6 million in the prior year, while normalized group NPAT was a pleasing NZD 138.8 million.
The significant difference between normalized and reported earnings primarily reflects the impact of the Adelaide casino license impairment of AUD 49 million, and the AUD 49 million provision for a potential civil penalty and associated legal costs payable by SkyCity Adelaide in relation to the AUSTRAC proceedings. During the past financial year, we restructured our international business operation, disestablishing a number of roles and integrating the remaining roles into the Auckland and Adelaide teams, as this will be a significantly reduced business going forward. The New Zealand operations performed very strongly, driven by robust growth in our electronic gaming machines revenues, which are actually back above pre-COVID levels, and also a strong rebound in nongaming revenues as visitors returned to our precincts in large numbers.
Table games performance recovered in the last quarter of FY 2023, as the easing of staff shortages allowed us to increase opening hours to meet the strong demand. Our hospitality portfolio also benefited from increased opening hours in response to the growth in demand from both domestic and international tourism markets. Operating margins in the second half of the year more closely represent the ongoing running of the business, with more normal opening hours and staff recruitment. The revised operating model we've implemented across the Auckland business will allow us to maintain strong EBITDA margins, helping absorb the impacts of the current high-cost inflationary environment we are facing. During the past financial year, we recognized an impairment of the SkyCity Adelaide casino license of NZD 49.7 million, following the completion of an independent valuation of the Adelaide cash-generating unit.
This reflects the significant reduction in the international business operations, plus the higher level of operating environment risk resulting from heightened uncertainties in the Australian gaming sector that could have future implications for SkyCity Adelaide. Examples of the heightened level of risk we face is the reduced appetite of the banking sector in Australia to provide both funding and transaction banking services to gaming sector, which could also likely result in higher costs being incurred by SkyCity. In response to these difficult operating conditions, we have restructured the Adelaide business, disestablishing a number of positions, changing the operating hours for table games, and in particular, implementing other cost and revenue efficiency initiatives. There's a lot of work that still needs to be done in Adelaide, and whilst the current operating environment remains challenging, the Adelaide team is very focused on finding the best solutions. Moving now to our balance sheet.
The group ended the FY 2023 financial year with a healthy level of liquidity headroom of close to NZD 600 million, which will help us to manage our future commitments and any uncertainties associated with the heightened level of risk in the sector. The group's strong debt gearing ratio of 1.5 times as at 30 June 2023, was well within the requirements of our financiers and in alignment with the group's investment-grade credit rating. Now, you're going to hear from Callum Mallett, our new Chief Operating Officer, our New Zealand Chief Operating Officer, and David Christian, our Australian Chief Operating Officer, with an update on the various properties.
Kia ora koutou. The New Zealand operational businesses had a successful year, with comparatively little business interruption compared to what we've experienced over the past few years. Our Queenstown site benefited from continued strong domestic demand and solid international visitation, in particular from the Australian and North American markets. Labor shortages created many challenges for the Queenstown team for the first six months of the year, and as resourcing issues have eased, housing in the Queenstown area has become an issue for all employers. The Queenstown team have done a great job at navigating these complex issues, and as international tourist numbers grow, we believe Queenstown is well positioned to benefit. Our Hamilton site had another strong year, benefiting from a resilient local economy.
During the year, we welcomed a new tenant to the precinct, Shanghai Restaurant, and have recently completed a refurbishment of our main gaming floor, bar, and restaurant, Amuse. It looks fabulous. Shortly, we will also announce a new tenant joining the precinct, a renowned restaurateur, who will open in 2024 in a vacant site at the entrance to the Hamilton precinct. Auckland had a solid year, emerging from lockdowns, restrictions, and border closures. Our hospitality business performed above our expectations, but still below pre-COVID performance. In fact, only our EGM business was above pre-COVID levels, showing the potential that still exists in our Auckland site even before we open our new assets. During the year, we were thrilled to welcome the wonderful Cassia restaurant to our precinct, as well as our new champagne bar in partnership with Moët Hennessy, Sky Bar, in the iconic Sky Tower.
In October, we will welcome Michael Meredith to site with his restaurant, Metita, which will offer a fresh and innovative Pasifika style. These new offerings will help to solidify our precinct and Federal Street as a must-visit food and beverage destination. In March of next year, we will open the much-anticipated Horizon Hotel, offering over 300 luxury five-star rooms in advance of the opening of the New Zealand International Convention Centre in 2025. Combined, these new assets will attract over 500,000 new visitors a year to the precinct and create over 500 new jobs. Thank you to our customers for your continued support, and to our team, who successfully balanced many challenges throughout the year. Ngā mihi.
The city of Adelaide sits on the Adelaide Plains, the traditional land of the First Nations Kaurna people, and we pay our respects to elders, past and present. SkyCity Adelaide has had a mixed year, with solid electronic gaming machine business outperforming the market, as well as strong revenue from our hotel, bars, and restaurants. However, we have also battled high cost pressures, such as large labor, food, and beverage increases, as well as much higher electricity prices due to the instability in the national grid. Legal and compliance costs of AUD 8 million were incurred relating to our response to the AUSTRAC and CBS matters, and implementing the Adelaide Anti-Money Laundering and Counter-Terrorism Financing Enhancement Program. We have increased our allocation in resources to continue improvement in our AML and CTF capabilities and host responsibility programs with an expanded and dedicated frontline team.
We've had to make some changes to our operations to rebase the Adelaide business. Some of these changes include a streamlined management structure and a reduction in VIP and table games operating hours, and we remain focused on offsetting inflationary pressures by driving price increases wherever possible. While the Adelaide market faces further challenges due to the AUSTRAC enforcement action and a more general operating environment in Australia, we do have a lot to look forward to. The Riverbank Precinct continues to be developed, and tourism is gradually recovering. Major new national events, such as the AFL Gather Round and LIV Golf, held in Adelaide, bolstered SkyCity's hospitality businesses, and we're pleased that these events have been confirmed to return to South Australia for years to come.
Perhaps the biggest opportunity we will benefit from in the year ahead is the opening of the 29-story Festival Tower from February next year, housing a university campus and expansive corporate office space. Just meters from SkyCity, it will bring substantially increased foot traffic, with around 5,000 people anticipated to visit the building each weekday. Our team is adapting our restaurants and bars to ensure we cater for the new market to capture a strong share of the opportunities. As we continue the necessary job of removing costs from our business and aligning to the new environment, we know we have exciting growth opportunities ahead, something we will embrace and optimize to become a stronger contributor to the SkyCity Entertainment Group and to our local community.
As you'll hear-have heard from David and Callum, it's been a very busy and productive year in our operating businesses. I think it's really important to acknowledge the important role that SkyCity plays in our communities that we operate in. We're very proud of the deep and extensive relationships we have with a wide range of organizations. In particular, over the last financial year, the SkyCity New Zealand Community Trust approved a record NZD 5.3 million in grants to over 120 different community organizations in New Zealand. Contributions were made to support the recovery of communities affected by Cyclone Gabrielle and the numerous extreme weather effects that we had here in Auckland. The SkyCity online casino business contributed strongly to the group earnings, despite a decline in EBITDA from the previous year.
This was due to the New Zealand market continuing to be aggressively targeted by offshore operators that are in breach of local marketing regulations. SkyCity does not operate in this way and therefore has lost market share over the course of the year. We continue to advocate for the introduction of online gaming regulation that is appropriate for the New Zealand online gaming industry and are encouraged by the National Party's tax policy that includes provision for an online gaming tax and the associated regulation that will be required to enable this. Online remains a strategic growth opportunity for SkyCity, and we will continue to actively engage with a wide range of stakeholders to further progress the potential regulation of the online gaming market in New Zealand.
There are obvious benefits to both the community, from a harm minimization perspective, and government, from revenue opportunities that will come from the imposition of taxation regime. We will be working closely with the DIA and the new minister to understand what the new regime will look like and how it will be implemented. I would now like to provide an update on trading, given we are more than three months into the new financial year. We started FY 2024 with good performance in July and August, particularly in Auckland, driven by the positive impact of the FIFA Women's World Cup competition. That was probably masking weaker domestic spend due to the uncertain economic environment, which became more apparent in September trading.
Without the benefit of any significant events, Adelaide was impacted by the broader economic conditions as persistent inflation and cost of living pressures impacted consumer sentiment and spending. We remain positive about prospects for the summer tourism season in New Zealand, with cruise ship visits and increased international aircraft capacity expected to support strong growth in tourist arrivals and the potential recovery in the domestic economy. We are well advanced in our planning for the opening of Horizon Hotel in March 2024. I'm very excited about that. That will bring our hotel capacity to close to 1,000 rooms on site. That will be followed in 2025 with the New Zealand International Convention Centre opening. Growth in SkyCity's New Zealand business will be underpinned by strong demographic and economic drivers, particularly with the forecast increase in international tourism.
In summary, we continue to see a modest year-on-year increase in normalized EBITDA for FY 2024, as we indicated at the FY 2023 result announcement. Noting this assumes the integration of the Auckland car park earnings for the second half of the year, but does not include any potential impact from the DIA's application to temporarily suspend our New Zealand casino operator's license. When I look back over FY 2023, there are a number of accomplishments I'm particularly proud of. These are the recovery in earnings from the key operating divisions of the group, with more growth to come, our ability to recruit high-quality staff to fill the significant number of vacancies we had at the beginning of the year. We're now over 4,500 employees across the group....
the improvements we've made in our AML/CTF and host responsibility capabilities, the ongoing enhancements we've made to the entertainment offering across all of our properties, and our ongoing involvement in the communities in which we operate. As this is my final annual meeting, I personally wanted to say thank you to the SkyCity whānau, our board, management team, and our incredible staff for their resilience and commitment to delivering world-class entertainment to the millions of customers that visit SkyCity precincts every year. I would also like to thank our shareholders for their support over my time as CEO. I've thoroughly enjoyed my interactions with many of you and appreciate the feedback, questions, and comments you've given me. To our external stakeholders, regulators, financiers, suppliers, and most importantly, our customers, SkyCity does not exist without you.
I believe SkyCity has a very positive outlook and is well-positioned to take advantage of an improvement in the economy and the projected growth in tourism as we look forward towards the opening of the Horizon Hotel and then the New Zealand International Convention Centre. The company has a very exciting ahead of it, and I would like to wish you all the very best. And a special go the All Blacks for the weekend. Thank you.
Thank you, Michael, and we appreciate the vote of confidence in the All Blacks. Sorry about the Irish game. Thanks, Michael. We will now hear from the chairs of the Risk and Compliance Committee, Audit Committee, and People and Culture Committee, as well as from the Chair of the SkyCity Adelaide Board. First up, I invite Kate Hughes to address the meeting on the activities of the Risk and Compliance Committee over the past financial year.
Thank you, Julian. Tēnā koutou. Good morning. My name is Kate Hughes, and I'm the Chair of the SkyCity Risk and Compliance Committee. I'm delighted to be here today and to address our shareholders. The Risk and Compliance Committee was established last year to enhance our focus on risk management and compliance across the SkyCity Group. The committee has met five times since the last annual meeting and has had four primary areas of focus: anti-money laundering, host responsibility, our risk management uplift, and health and safety. I'll outline a little bit of the company's activities across these four areas over the last year. With respect to host responsibility, we've continued to invest in our host responsibility programs, and we now have more than 50 dedicated host responsibility staff across our land-based sites.
In Auckland, we've updated our analytic capabilities for carded players, and we've enhanced our facial recognition technology to monitor repeat withdrawals and multiple declines by patrons at our ATMs to enable us to identify indicators of problem gambling and allow our host responsibility folks to get to them and provide support. Earlier this month, we rolled out the same technology at our Hamilton ATMs. In June this year, we trialed the use of ID scanners at the Auckland Casino. This technology helps us to minimize the risk of minors entering our casino. Following a successful trial, we implemented these scanners across all of our New Zealand sites in July. We also undertook some scenario-based mystery shopping activities across our New Zealand sites, and the results have showed that our staff have strong awareness around identifying and minimizing gambling-related harm.
During the year, we opened a new host responsibility area in the Auckland Casino precinct. It's adjacent to the main gaming area. The new space includes an area for our host responsibility staff, so that they can be more responsive to issues that may arise on the gaming floor. There's a meeting room where our host responsibility staff can meet with patrons in private, and also a public resource room, where patrons can find information on responsible gambling, including our host responsibility program, provided in multiple languages. External audits were also conducted on our host responsibility programs across our New Zealand casinos during the year. Importantly, these audits included reviews of our documentation, testing of our implementation of our policies, and interviews with our staff to identify any systemic cultural issues.
While no material compliance issues were identified, there were areas of continuous improvement that have been raised and are being actioned by management. However, the recent action by the New Zealand Department of Internal Affairs in relation to a customer in New Zealand is evidence that continued vigilance is required. The department's suspension application is currently before the New Zealand Gambling Commission, and it will be some time before an outcome is known. We have made it clear to our regulators that we have a strong commitment to host responsibility, and we will do better. With respect to anti-money laundering, the civil penalty proceedings filed by AUSTRAC against SkyCity Adelaide in December 2022, for alleged serious and systemic non-compliance with the Australian-based Anti-Money Laundering and Counter-Terrorism Financing Act, has continued to engage an enormous amount of board and committee and management time throughout the year.
SkyCity Adelaide and AUSTRAC are currently working towards agreeing facts and potential admissions before the Federal Court identifies a process for any remaining disputes, if there are any. In August, we advised the market that we'd booked a NZD 49 million provision as at 30 June 2023, for any potential civil penalty and associated legal costs. During the year, SkyCity Adelaide was also subject to an independent review by Consumer and Business Services, our Adelaide-based gaming, gambling regulator. This review was placed on hold in February 2023, pending resolution of the AUSTRAC proceedings. While it remains on hold, SkyCity Adelaide has agreed to appoint an independent expert, as you've heard, Kroll, to review and monitor SkyCity Adelaide's anti-money laundering and counter-terrorism financing, and host responsibility enhancement programs. We feel we're making good progress.
However, we understand that our processes for assessing money laundering risks are dynamic, and we know that the job of minimizing risk in our casino will never be complete... Given the seriousness of the matter, AML risk governance has continued to remain with the full board for most of the year. The third area of our focus this year was, in 2023, adopting a three lines of defense model, uplifting our capability in relation to risk management. We appointed an experienced senior executive, who you've heard from, Carolyn Kidd, to the role of Chief Risk Officer, reporting to the CEO. This is a strong signal of our commitment to enhancing risk management at SkyCity. Carolyn has a broad remit and brings financial crime and host responsibility in both Australia and New Zealand into the risk management team.
Introducing the Three Lines of Defense model and consolidating our most significant compliance risk areas under the Chief Risk Officer, will improve consistency and compliance practices and culture across all of our sites. As part of this revised model, we've also separated the internal audit function from the risk management team, so that it can provide truly independent advice to the board and executive team. The internal audit function now has a reporting line to the Chair of the Audit Committee, Chad Barton, who you'll hear from next. The final area of focus for the committee this year was health and safety. We received reports on safety performance using both lag and lead indicators, as well as detailed reporting on all significant safety incidents.
We did several deep dives into critical risks, critical health and safety risks for SkyCity, and the whole board has participated in several safety walks with the SkyCity head of health and safety. These safety walks are a really important way for the board to see how our safety protocols work in practice, and also to send a strong signal to our staff about our commitment to a safe workplace. We also commissioned an independent health and safety review to assess our approach to health and safety management across our business. It looked at the requirements of the New Zealand Health and Safety at Work Act, and the Australian Work Health and Safety Act, and what would be considered good practice in health and safety management. The review found that there's been significant improvement in health and safety management at SkyCity over the last three years.
No areas of immediate concern were raised, but several improvements were suggested, and these are being actioned by management. So in conclusion, it's been a challenging year, but the establishment of the Risk and Compliance Committee has meant that we've had a dedicated focus on these four areas in particular, and we'll continue to drive performance improvement in risk and compliance across SkyCity. Thank you. Back to you, Julian.
Thanks, Kate. Next, I invite Chad Barton to address the meeting on the activities of the Audit Committee.
Thank you, Chair. Good morning, shareholders. I'm pleased to report on the activities of your audit committee, having taken up the position of chair of the audit committee following the annual meeting last year. In August last year, the Audit and Risk Committee was split into two separate board committees: a dedicated audit committee and a dedicated risk and compliance committee. This committee has met six times over the last financial year. The primary objective of the audit committee is to assist the board in fulfilling its responsibilities relating to financial accounting and reporting, capital management and liquidity, external and internal audit, and tax planning and compliance. Firstly, in relation to financial accounting and reporting, our FY23 financial statements reflect several complex judgments, including the New Zealand International Convention Centre and Horizon Hotel construction project, where there remains significant estimates for the costs of demolition, reconstruction, and completion.
The NZICC project is almost back to the point it was just before the fire occurred in October 2019, and we're excited about the expected opening of the Horizon Hotel in calendar 2024. Each year, we are required to assess the carrying value of our assets. In Adelaide, given the reduced international play, slower ramp up in table games, and higher costs of compliance, we recognize the AUD 46 million impairment of the value of SkyCity Adelaide casino license. Also in Adelaide, the AUSTRAC civil proceedings against SkyCity Adelaide have proceeded, and there was enough information to estimate a potential liability with an, forty-five million Australian dollar provision for potential penalties and legal costs booked. I note that this is an estimate, and as with all estimates, the actual liability could be materially different.
The South Australian Regulator's independent review of SkyCity Adelaide remains on hold, pending the resolution of the AUSTRAC proceedings, and prior to any findings or any final report being provided, it's not possible to determine any potential regulatory or financial outcome. On this basis, no provision has been recognized, and the matter remains a contingent liability. Not included in, within the FY 2023 financial statements is the repurchase of the long-term concession granted over our Auckland car parks that is subject to ongoing dispute with the counterparty. We expect the repurchase to be settled in FY 2024. In the area of capital management and liquidity, in FY 2023, the audit committee focused on continuing to maintain our balance sheet strength and liquidity to manage our future commitments and uncertainties.
The balance sheet at 30th of June 2023 can be highlighted by our continued investment grade rating from S&P Global Ratings of stable BBB-, gearing of 1.5 times, and a well-diversified debt capital structure between U.S. private placement notes, New Zealand bonds, and the syndicated bank facilities. At the 30th of June, our liquidity headroom was NZD 593 million. Given the liquidity and the financial performance of the business, in FY 2023, the committee recommended, and the board declared, an interim dividend of NZD 0.06 per share and a final dividend of NZD 0.06 per share, for a total of NZD 0.12 per share in FY 2023. The committee, working with the full board, are committed to managing the liquidity of the business while continuing to invest in our properties and return excess funds to shareholders.
The board remains committed to the group's dividend policy. Regarding external and internal audit, PwC will continue to be the external auditor for the group in FY 2024, with Richard Day being the lead partner in the room this morning. The board seeks shareholder approval today to fix the fees and expenses for our auditors in Resolution 5. As mentioned by Kate Hughes in the previous speech, as part of maturing our three lines of defense assurance model, we have separated the internal audit function from our risk management function so that we can provide independent assurance to the CEO and the board. The internal audit function now has a direct reporting line to myself as chair of the audit committee. We are continuing to build out this function with internal capability, supplemented by external specialist skills where required.
The committee and the board meet with PwC and internal audit, independently of management, on a regular basis. Finally, in relation to tax planning and compliance, SkyCity is a major contributor to the communities that we operate within. In FY 2023, we contributed NZD 189.5 million in taxes to government, including GST, income taxes, gaming taxes, and duties. We contributed a further NZD 10.1 million in community contributions, levies, and sponsorships. In FY 2023, our effective tax rate was high, at 85% of profit before tax, with the main reason being the combined AUD 91 million of adjustments in relation to the Adelaide property for the casino impairment and the AUSTRAC civil penalty and associated legal costs being non-deductible.
There also remains an ongoing contractual interpretation difference with Revenue South Australia on the treatment of loyalty points for the purposes of calculating casino duty. To progress this matter, both parties agreed to take the matter directly to court, to the Court of Appeal, to seek certainty and resolution. The decision of the Court of Appeal is pending, but expected to be within this financial year. Thank you.
Next, I will speak to the activities of the People and Culture Committee as Chair of this committee. In addition to being the Chair of the SkyCity Entertainment Group, I am also-- I also chair the People and Culture Committee. Key areas of coverage for the committee are remuneration, particularly that of the senior leadership team, diversity and inclusion, succession planning, talent and attraction, and culture. Over the past financial year, we saw a new Chief People and Culture Officer join the business, Shaun Philp, who is with us today. Shaun, has previous-- was previously Chief People Officer at Chorus since 2017. Shaun adds significantly to the capability in this area, and we are pleased to have him aboard.
Shaun is picking up the various programs of work within the People and Culture Committee, and in particular, is leading the ongoing review of remuneration and incentive programs within the business to ensure they are fit for purpose. In particular, the review of the long-term incentive program, which was delayed following the departure of the former chief people and culture officer, is now being picked up again. A key issue for the committee to address throughout the past financial year was how to address the impact of the AUSTRAC statement of claim filed against SkyCity Adelaide in December 2022, and ultimately, the decision to make a AUD 45 million provision for a potential AUSTRAC civil penalty and associated legal costs. The activity alleged in the statement of claim largely relates to the period before the 2023 year.
However, the committee and board determined it was important to make an appropriate sanction. To this end, achievement of the compliance portion of the short-term incentive payments was set at 11.7 out of 20, and an additional 25% reduction was applied to all short-term incentive payments. Against the very disappointing nature of the AUSTRAC allegations, the committee and board has also had to weigh up the good progress made in Adelaide in their enhancement program and the high amount of work for management as a result of this. As a group, SkyCity employs over 4,500 people in New Zealand and South Australia. A key feature through the 2022 financial year was the shortages of staff in a number of areas. This has eased, and through the 2023 financial year, our employee numbers grew by 699....
Vacancy levels have also reduced significantly since the prior year. With the completion of the Horizon Hotel and New Zealand International Convention Centre nearing, we have commenced recruitment for what will be ultimately an additional 700 jobs. Lastly, the committee follows employee engagement scores closely. The 2023 survey saw a response rate of 84% of permanent employees and an overall engagement score of 78%, which is two percentage points above the global average benchmark and in line with the New Zealand average benchmark. We will now hear from Glenn Davis, the Chair of the SkyCity Adelaide Board.
Thanks, Julian, and good morning, everybody. This time last year, when I addressed you about the South Australian Casino, I mentioned the ongoing inquiries being conducted by AUSTRAC and the South Australian State Regulator, Consumer and Business Services. As you've already heard this morning, the AUSTRAC inquiry led to regulatory action being taken against SkyCity Adelaide, which we continue to work through, and the CBS inquiry is presently on hold. In the meantime, Kroll has been appointed as an independent expert. While we work through these issues, the anti-money laundering and host responsibility enhancement programs that I referred to last year continue to be embedded into our operations in South Australia. It's a big task, but the team is committed to the enhancement work programs, is well-resourced to deliver them, and we expect both programs to continue on track under constant review by the SkyCity Adelaide Board.
As a sign of our commitment, our financial crime team has grown from 3 to 19 people, and our host responsibility resources on the gaming floor have been expanded. A new AML/CTF program has been adopted and rolled out across the business, together with an associated new risk appetite statement, risk management policy, risk management operating methodology, and a number of new standard operating procedures. At the same time, we've put in place dedicated risk management and assurance resources to assist in ongoing review of SkyCity Adelaide's operations and compliance. In host responsibility, we're continuing our good work in further development of our enhancement program across the business, and we've again rolled out significant new standard operating procedures.
We've also applied to the South Australian regulator to introduce a Focal predictive risk algorithm and facial recognition long-stay technology to allow us to further work with patrons to ensure that their gambling is safe. We're hopeful of receiving approvals from CBS in the not-too-distant future, as we see the use of these technologies as important in further improving our host responsibility, performance, and maintaining a safe environment for all of our patrons. At the same time, it's important we continue to focus on the SkyCity Adelaide business itself to position it for the post-COVID world and the structural shift that's now occurred in the Australian casino industry. That involves David Christian and his team working to strengthen the Adelaide property as an integrated entertainment venue and to improve the performance and contribution of all parts of our business, whether that be in food and beverage, accommodation, or gaming.
The Riverbank Precinct in Adelaide, where your property is located, continues to grow and evolve as a vibrant and busy corporate and entertainment precinct, and we're working to ensure that SkyCity is an integral part in that growth and evolution. At the same time, our quest for improved performance has required the team to dig deeply into the cost profile of the business with a view to making the business as efficient as it reasonably can be. That's required some changes in recent months, and I thank the entire team in Adelaide for the manner in which they've embraced those changes, together with all the change associated with our anti-money laundering and host responsibility enhancement work programs.
There's still plenty of work in front of us in continuous improvement in terms of both regulatory compliance and further refinement of our operating model to position SkyCity Adelaide as a safe and admired entertainment and gaming drawcard for everybody. The team across the entire SkyCity Group is committed to that work, and we look forward to reporting further progress in due course. Thank you.
Before we move to the formal resolution set out in the notice of meeting, I will briefly outline today's voting procedures. Voting will be by way of poll. You will need to complete your voting directions online, or for those attending in person today, your voting forms. Persons attending the meeting who are not shareholders, proxy holders, or corporate representatives of a shareholder may not vote on today's resolutions. For those attending online, select your voting direction from the options shown on your screen. Your vote has been cast when the green tick appears on your screen. To change your vote at any time before voting closes, select Change your Vote on your screen.
For those attending in person today, please complete and sign your voting paper and place your completed voting paper in one of the ballot boxes on your way out of the theater at the close of the meeting today. Many shareholders who are not attending this meeting have already voted by proxy. Approximately 562 million proxy votes, representing approximately 74% of the shares on issue, were received prior to the cutoff for proxy voting at 11:00 A.M. on Wednesday, the twenty-fifth of October. We will now move to the formal resolutions to be considered by the meeting. The first two items of business concern the election of directors. In accordance with the requirements of the NZX listing rules, David Attenborough and Donna Cooper retire at this meeting and, being eligible, offer themselves for election.
Resolution three, concerning the re-election of Sue Suckling, was formally withdrawn in advance of the meeting and is not required to be put to shareholders today, following the appointment of Donna Cooper to the board. Noting that under SkyCity's constitution, at least two directors of the board must be ordinarily resident in New Zealand, being now Donna and myself. Consequently, as noted earlier in the meeting, Sue will retire from the board at the conclusion of the meeting today. It is my pleasure to move Resolution one, to elect David Attenborough as a director of the company. David was appointed to the SkyCity board on the third of March, 2023. The board considers David to be an independent director and unanimously recommends that shareholders vote in favor of his election. I will now ask David to address the meeting.
Thank you, Chair, and it's certainly a privilege to be here today and offer myself for election as a SkyCity director. And to give you a bit of background, about myself, I've really managed and developed global gambling and entertainment businesses for over 30 years, working across various businesses in Europe, Africa, and Australia. And as mentioned by the chairman earlier, my most recent role was as CEO of Tabcorp, for 12 years, and I finished up as CEO in, 2022, when we de-merged that business into a separate lottery business and an ongoing, betting business under the Tabcorp brand. And, certainly during my tenure at Tabcorp, we managed a lot of the very complex regulatory and compliance issues that SkyCity are facing into today. On my qualification front, I've really got a grounding in the sciences.
I did a degree in chemistry years ago, and I hold a Master's of Business Administration, and I'm a graduate of the Australian Institute of Company Directors. And if I'm elected today, I certainly look forward to continuing to work with the SkyCity board and management team, and to building really a resilient and successful company that delivers long-term value for its shareholders and the community. Thank you.
Thank you, David. I move that the meeting elects David Attenborough as director. Firstly, are there any questions from the floor? Now, there are several roving microphones available for those people who do wish to speak. Given the theater-style speaking, if you have a question, please stand or put your hand up where you are and wait for a microphone to be passed along the row to you. Please have your attendance card or voting form with you, and introduce yourself and note whether you are a shareholder or a bondholder.
Coralie Van Camp, shareholder, and also representing family interests. So I've gone through your annual report, and the main asset owned by SkyCity is actually right here, not Australia.
Uh, Coralie-
Yes.
At the moment, we're just gonna take questions in relation to David.
Well, I would like to talk about Australian directors on the board, of which there are four-
Well-
and only two New Zealand directors.
That is, so Coralie, what we will do is we will absolutely take that question, but can I just ask that we take that one in general business? And I will, I will answer that question. I'll give you your very first opportunity to ask it.
Well, I feel before we vote on the Australian directors' appointments to this board, we should have a discussion on why there are 4 out of the 6.
Okay, that is a fair point. Would you like me to give my response?
Yes.
Look, so, yeah, so we have four out of six. We have indicated that we will appoint—we would like to appoint a seventh director over the coming year. It is most likely that that seventh director would be a New Zealand-based director, so that would be four Australian and three New Zealanders. When I look at or when we look at the needs of this business from a board perspective, which revolve heavily at the moment around risk, compliance, and gaming experience, those skills are best found in our Australian colleagues. Bless them. We like them a lot. So personally, I can attest to the fact that they add a huge amount of value on this board. We certainly, when we were searching for directors, we looked at, you know, directors from New Zealand and Australia.
So there was absolutely no preconceived bias. But the best people we could take for this business, which is the best thing you want as shareholders, is to take the directors you have in front of you.
Well, Mr. Cook, you've only been here five minutes yourself, for about less than three years, I believe. You're talking about we. I'm wondering, who is actually directing the directors? I mean, how do you come to this conclusion that you need four Australian directors on the board? Even your management, the majority of your top management have been here less than three years.
Yeah, so Coralie, do you have a specific question you would like to follow up?
Yes. I really wonder if you are kowtowing to some Australian interests... and having four Australian directors on the board?
Coralie, I don't kowtow to anybody. My directors can attest to that. So-
So who apart from you is actually searching for these directors? You say "we," is this a New Zealand company?
Okay, so Coralie, Coralie, what I'm gonna do is I'm gonna provide one final answer to this question, and then we're gonna cut you, I'm afraid, and we're gonna move to further questions regarding David Attenborough's appointment. You are more than welcome to come and see myself and any of the Australian directors after this meeting, but in the interest of time, we will need to keep moving.
I have to say-
No.
I must vote against.
That is, that is entirely your right, Coralie. And so the way these appointment processes work, we will spend a lot of time talking to our larger shareholders to understand what sort of preferences they want. Now, there are a number, large number of New Zealand shareholders who sit on the register, so we will take their interests into account. We will then work with a search agent who will go out across New Zealand and Australia, and indeed further afield, looking at potential candidates. I would have to say it has not been easy to find directors wanting to come on this company at the moment because of the issues that it faces. But we do not just want anybody to come on this company. We want people who are committed and are gonna add real value.
These, in my opinion, are the people you have in front of you. Are there any other questions? Thank you. Do we have any questions online?
There's no questions online on, at this point.
Thank you. I have moved the resolution, so I now put the resolution. Shareholders should select their voting direction for resolution one. It is my pleasure to move resolution two, to elect Donna Cooper, who is a New Zealander, Coralie, as a director of the company. Donna was appointed to the SkyCity board on the twenty-eighth of September, 2023. The board considers Donna to be an independent director and unanimously recommends that shareholders vote in favor of her election. I will now ask Donna to address the meeting.
Thank you, Julian. Tena koutou katoa. Ko Donna Cooper ahau. It's wonderful to be here and to have the opportunity to speak with you and share a little bit about my background and experience. I'm an experienced CEO, director, and financial services expert with experience in New Zealand, Australia, and globally. I've got qualifications in international business and strategic leadership. I'm a member of the New Zealand Institute of Directors and Global Women. Most recently, I have been the CEO of TSB, New Zealand's sixth largest bank, and been responsible not just for leading the business, but for significantly uplifting its regulatory compliance, capability, and culture. This included addressing a material failure to comply with AML/CTF prior to my time, and building a new risk and compliance framework, organizational culture, and reestablishing credibility with the three New Zealand banking regulators. Whilst also creating award-winning, customer-focused digital products and services.
I am deeply committed to helping SkyCity thrive, both to navigate its current challenges and build on its culture, people, and customer focus to strengthen the business for a successful future. Ngā mihi nui.
Thank you, Donna. I move that the meeting elects Donna Cooper as a director. Are there any questions from the floor? No. Are there any questions online?
There's no questions online for this resolution at this time.
Thank you. I have moved the resolution, so now I put the resolution. Shareholders should select their voting direction for resolution two. Resolution four proposes an increase in the total pool for non-executive director fee allocation from NZD 1.44 million to NZD 1.54 million for each financial year, being an increase to the pool of NZD 100,000 or approximately 7%, and that such increase take effect from 1 July 2023. The total pool for non-executive director fee allocation was last increased by shareholders at the company's 2018 annual meeting. At that meeting, shareholders voted in favor of a total pool for payments to non-executive directors of NZD 1.44 million.
This proposed increase will provide the board with sufficient headroom to appoint a seventh non-executive director, who, as I say, we would like to have a New Zealander to the SkyCity board over the coming year, and to meet the fees payable to the independent non-executive directors on the separate SkyCity Adelaide board, and any additional or ad hoc SkyCity board committee fees. This increase will not, I repeat, not be used to increase the existing fees to be paid to non-executive directors. As outlined in the notice of meeting, I move that the total fees for non-executive directors be increased to NZD 1.54 million for each financial year, and that such increase take effect from 1 July 2023. Are there any questions from the floor? No. Any questions from online?
... Yes, I just have one question. It comes from shareholder John Roberts, and the question says: "Can the directors please explain why they believe it is appropriate to seek an increase in directors' fees, given the serious failures in governance over the past year?
Yeah. Thank you. Well, the answer is, I think, pretty straightforward. We are not seeking a commitment, sorry, an increase in fees for any of us individually, and you have our commitment that will not take place over this year. All we are seeking is an additional amount of money within the pool to allow us to appoint that seventh director and get another New Zealander. Now, we just have a question down here on the floor.
Thank you. Andrew Whitaker, shareholder. Just a quick question: If it's for a new director, why does it need to be backdated to the first of July?
This is a good question. We certainly wouldn't be backdating their pay to the first of July. So quite possibly, we would get to the end of the year, and if we haven't spent it, there may be a little bit left over, so I, I don't think we propose to spend all of it. Any other questions? Okay. I have moved the resolution, so now I put the resolution. Shareholders should complete their voting papers for resolution four. Resolution five involves the setting of remuneration for the auditor. PricewaterhouseCoopers is the auditor of SkyCity, and that firm has indicated its willingness to continue as the auditor of the company. I move that the directors be authorized to fix the auditor's remuneration. Are there any questions from the floor? No. Are there any questions online? Thank you.
I have moved the resolution, so now I put the resolution. Shareholders should select their voting direction online for resolution 5. In the notice of the meeting, we invited shareholders and bondholders to submit questions prior to the annual meeting. No questions were received by the deadline. I now open the meeting for questions and comments from shareholders or from anyone who has been appointed as a proxy or a corporate representative about the operations and management of the business. I will either answer your question myself or redirect it to a board member or to the Chief Executive Officer, as may be appropriate. And I should just note, this is a meeting of shareholders for the company.
If you have detailed operational questions around the operation of the site, any views on how things are going at a detailed perspective, I would encourage you to take that up with myself, with Mike, or with any of the team. After the meeting, we will be available to answer as many questions as you like. But, firstly, we will address questions online. Are there questions online?
Yes. We've got a question from shareholder Donald Charleston: Why is so much time taken up at the beginning of the meeting regarding instructions to people attending online? Surely, the users of the online function can work out how to use the options themselves.
It's a very good question. It's probably for people like me, to be honest, who might take a little more to sink in.
Okay, we've got a further question from Jiwa Zhao. Michael Ahearne mentioned that mandatory carded play is likely to be a requirement in the future. Could you please expand on what this looks like for domestic and international customers?
Mandatory carded play is whereby anybody playing in the casino needs to be a member and have a card, and then they're playing a machine or a table. They have to operate the machine and make it effective, they have to be using their card, and that would apply to our local customers and international customers as well. So we're exploring the technology that would enable that.
There's no further questions at this time online.
Do we have a question up here on the floor?
Michael Bowden, shareholder. Has the company identified the individuals responsible for the Adelaide debacle? And are those—what's happened to those individuals? Are they still working for the company?
It's a very good question. I would answer that by saying, the events which AUSTRAC are investigating primarily relate to pre-2021 and probably range over a period of six years, seven years? Yeah. So a lot of that, a lot of what has happened is historical. This has obviously been a question which the board has pursued with some vigor as well. And in short, the short point of which is, in reality, when you look at the team in place in Adelaide and New Zealand today, there has been actually quite a lot of change over time. So many people have left. And the board has also asked itself the question: For those people who remain, what do we think of them? Are they appropriate?
And I would have to say that, on the whole, for both those staff in Adelaide, but also the staff here in New Zealand, you know, what we've seen is a really strong commitment to, you know, firstly, to acknowledge that things did not go well. Secondly, to look at how we can fix things up. And thirdly, there has been a real commitment, and a huge amount of work. You will not see it, you know, from where you sit, but we sort of see it internally. A huge amount of work to put us back on track to where we should be. So that's, that's not an excuse, but it's certainly been a topic of much discussion of the board. I just have another question here.
Yes, Scott Patterson, shareholder. I've had an association with Sky since 1995. So I've seen a lot of CEOs come and go on their very generous remuneration packages. And you're about to depart soon back to Ireland, is it? Yes. And I wish you very well on your next endeavors. But the share price 50% down over the last 5 years is not a good result. But what I've noticed is, I can't help but notice the risk and compliance dating back to 2014, if you said it's 6 years before 2021 or thereabouts. It's been very lax, and it's good that going forward, you've got new systems and policies in place. That's positive.
Being, having a monopoly position in terms of the land footprint in certain geographical areas, comes with a responsibility and a social license, and the financial crimes that have been put toward you guys is very concerning. But my question is something kind of related to the serious crime allegations. It's the convention center that seems to be taking forever to get built. So I do understand there was a fire and there's been other issues there. But what dollar amount are you seeking from the contractor through loss of income? Given that the convention center should have been built a long time ago or completed a long time ago, and there's obviously been losses of income associated with that new venture. Thank you.
Thank you. It's a very good question. I mean, it has been very painful, hasn't it? The convention center, it is coming. I mean, I must, I mean, it's a slight side, but, whilst we had significant issues with Fletchers at the outset of the build of that project, they are performing very well currently. They are on or generally ahead of timetable. We are seeing a very, very large number of people on site each day. I think at the moment there are around 1,400 people on that site, working their way towards completion. So, you know, we, we think actually they're doing a pretty good job now. In respect of will we have any claims in terms of loss of profits, just due to the time which has taken?
Look, that's something which we will need to consider in the fullness of time. Right now, our main focus is working with them, to the extent we can, to help them actually get it finished and open, and open. But that is something we will think about at some point. Question back, Mr. Bowden.
Yes, was selling the car parks a mistake? And are you going to make a loss on this transaction? Is the company gonna make a loss?
Yeah. Was it a mistake? I'll give you my unvarnished view. Yes, like it should have never happened. It was one of those transactions where it was sort of... It's a financing kind of a transaction. It's a bit like borrowing money, in a way. We thought we could make a few cents here, but what we were taking on were a lot of unpriced, hidden risks, which we are now paying, right? So, you know, yeah, we won't be doing that again. Not while I, myself or this board are around. Will we make a profit on it? Well, look, I think that probably depends on what the court decides. You may know that we are in court at the moment with our fairly difficult to deal with counterparty.
We will receive a decision from that court, which will steer an outcome, one way or the other, and we just need to see where that goes. Sorry, we had a follow-up?
Yeah, the question was, are you likely to make a loss?
Well, we won't know that until we have final determination from a court and a final transaction done. Yes, another question there.
Gordon Wallace, shareholder. You're going on this one. We were talking about with the car parks. Are you saying also that the car parks under Fletcher or what's happening there? We'll get it back next year, around March? Did you say that? Are we still waiting for the car parks over there? There, nothing has been finished on that side of it.
Do you want to take this one?
I'll take that question. We've actually recently, in the last couple of weeks, received back a large number of car parks, and they're in the process of being operationalized. There is still some remaining car parks that will come right at the end of the project in 2025, when we open it. But there's a large portion that have actually come back recently.
Yes, Curly.
... I voted against selling the car parks. Supplementary question-
I would have joined you.
Supplementary question about the directors: What does it cost to fly them all over for a board meeting and back?
Oh, I could not actually answer that. Well, I mean, look, it will cost a little bit. We do also go over to our Adelaide casino at least once a year, so that would cost a little less for the Australians to come over. We do put them up within our own hotels. We don't give them the presidential suite. I can assure you of that, Coralie, as much as they ask. So effectively, we're using kind of spare hotel rooms when they're here, so we certainly try and save as much money as we can by doing that. Yes, sir. And why not? We'll take, we'll take the gentleman here first.
Good morning. Martin, Martin Kellett. I have two questions relating to the Adelaide Casino. One is very simple to answer. Now, I'm a mere sprat of a shareholder, but I've been in this from the beginning, on and off. My first question, though, is regarding AUSTRAC inquiry. It sounds like quite a provision, is it AUD 47 million, has put aside for a potential fine, and that money will not be tax deductible. To counteract the inquiry's been made regarding money laundering and the down valuing of the casino as well, takes you up to nearly AUD 100 million. Question is that, has anyone at the Adelaide Casino seen evidence that in the past years, the Adelaide Casino was used for bankrolling terrorists, anti-laundering activities?
Well, so through the investigation, which AUSTRAC has made and commenced in, I think it was August 2021, that is exactly what they were investigating. They lodged a statement of claim in the court at the end of last year, so it took them a bit over a year and a half to undertake their investigation. In their statement of claim, there were exactly such allegations.
Oh.
Yeah, I agree. Disappointing. And that is where we are today.
Thank you.
Yeah.
Second question-
Yes.
is, I have been a little sprat investor since the beginning, and I have noticed, I've been invested in many businesses. Many New Zealand businesses go over to Australia like Christ cleansing the temple and come back with their tail between the legs. I think only Mainland is one that's really made it. I can remember Air New Zealand going over and coming back, not just with tail between its legs, but a leg lost, called Ansett. The taxpayers end up having to bankroll and bring Air New Zealand limping back to New Zealand. I do remember, though, SkyCity at that time investing in the Darwin Casino, and that was a terrible transaction. And I heard the very same words I heard about Adelaide Casino today being spoken about Darwin when we first moved in. We left between legs, and we got out.
We sold out in Darwin. Now, today, I've listened to everyone on us, on, on Adelaide. I haven't heard anyone prophesy a golden future for Adelaide. I've heard we're gonna lose so many million here, so many million there. We've got all sorts of problems with Adelaide. Is there any possibility that we would wisely go back to New Zealand, netting only, and just focus on the New Zealand casinos and do what we wisely did with Darwin? Cut your losses, get out, and rebuild. There's enough... You don't need-- I'm from Canada. You don't need foreigners-
Uh.
to run your businesses.
I get the gist.
You've got enough-
Sir.
knowledge and experience in this country.
Sir, put the speaker on.
Sorry.
Yeah, sir.
I'm just asking.
Yeah, I get the gist of your question.
Yeah.
If you'll allow me an answer.
Would you look at selling off the Adelaide Casino?
Yeah. So if we could-
Thank you.
Just take the mic, please. Thank you. I mean... Well, let's see. Where do I start? New Zealand companies which have gone to Australia and come back with their tails between their legs. Well, we all know there's plenty of those, don't we? You're absolutely spot on the money. Darwin, yes, that was probably an example of exactly that for us. What do we think about Adelaide? Well, hey, we could, we, you know, yes, it's, it's troublesome for us at the moment. It's probably not performing exactly like we would like it to at the moment. We could come back with our tails between the legs, but we would be selling at a point where the business is not doing well, and we would be selling at a low price. That is the reality of that.
When we look at that business, fundamentally, like it is the only casino in South Australia, right? It is a fantastic precinct right in the middle of town, right by the convention centers, right by the sports stadiums. It has the number one hotel now in South Australia. I believe this hotel actually won the best new hotel in Australia. So it has a fantastic hotel. It is the hotel of choice for people coming into Adelaide now, and we have what has been a fantastic upgrade of that facility done some years ago. So actually, we've got a great asset. Yes, it's difficult for us, but if we were to cut and run now, frankly, we'd be running away from our problems.
you know, I think my view and the board's view is that with a little bit of work and a little bit of attention, you know, we're not gonna make any excuses here. We just need to focus on it, run it well, and it will ultimately be a good business. But you need to have a bit of patience with us, and give us a bit of benefit of the doubt.
... Thank you. My question is also to do with the AML legislation. I'm really uncertain as to why it's only after the regulatory scrutiny that all of the things that you've spoken about this morning are being put in place. Surely, if the responsibility is there, if the legislation is in place, this shouldn't be a reactive thing, it should have been a proactive thing, and I've heard no real explanation as to what went wrong. Thank you.
Well, I would agree with you, sir. Yeah, difficult one, and look, I mean, this has been, again, the subject of much board and management discussion, about why we were not looking at these things closer ahead of time. I'm afraid I do not have any excuse for you on this. Any further questions from the floor? Any questions online?
No more questions online.
Going once, twice, three times. Okay. So thank you for your attendance to the resolutions. That concludes our discussion on the items of business. Voting will shortly close online. Please ensure that you have cast your vote on all resolutions. For those attending in person, please sign and place your completed voting paper in one of the ballot boxes on your way out of the theater. All votes will be counted and then scrutinized by the company's share registrar at Computershare. The results will then be advised to the New Zealand and Australian Stock Exchanges later today. I will now pause to allow those attending online time to finalize their votes before voting closes. Good. Okay, voting is now closed online. Thank you for attending the 2023 SkyCity Annual Meeting today. Refreshments are available in the foyer at the close of the meeting today.
Representatives of Ngāti Whātua Ōrākei will now formally close the meeting, and as I noted before, the board and management will be present for refreshments. So if you have any further questions, any further feedback, would like to follow anything up, please come and see us. It's,
i t's poignant that we sing that pātere as a reminder of our tūpuna Āpihai Te Kawau, who welcomed the people to our shores here in Tāmaki. And to acknowledge those who have passed on, the many that we, we treasure, that we miss, that aren't here amongst us. So we fare them well, and we turn to each other, to greet each other, to carry on the legacy they have left for us. Tēnā koutou, tēnā koutou, tēnā tātou katoa.