VBASE LIMITED STATEMENT OF INTENT - Year Ending 30 June 2017 - Christchurch City Council
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
VBASE LIMITED STATEMENT OF INTENT Year Ending 30 June 2017
TABLE OF CONTENTS 1.0 Introduction........................................................................................................................................... 1 2.0 Directory............................................................................................................................................... 1 3.0 Objectives ............................................................................................................................................ 2 4.0 Nature and scope of activities .................................................................................................................. 7 5.0 Governance ........................................................................................................................................ 12 6.0 Performance targets ............................................................................................................................. 13 7.0 Accounting policies .............................................................................................................................. 17 8.0 Distributions ........................................................................................................................................ 17 9.0 Information to be reported to the shareholder ........................................................................................... 17 10.0 Acquisition/divestment and other significant transactions policy................................................................... 18 11.0 Compensation sought from local authority ............................................................................................... 19 12.0 Estimate of commercial value ................................................................................................................ 19 Vbase Limited Statement of Intent Year Ending 30 June 2017
INTRODUCTION
This Statement of Intent (SOI) is prepared by Vbase Ltd (Vbase) in accordance with Section 64(1) of the
Local Government Act 2002.
The SOI specifies the objectives, nature and scope of the activities to be undertaken by Vbase, and the
performance targets and other measures by which the performance of the company may be judged. It
covers the three financial years ending 30 June 2017, 2018 and 2019.
The process of negotiation and determination of an acceptable SOI is a public and legally required
expression of the accountability relationship between Vbase and its shareholder, the Christchurch City
Council (Council).
The SOI is reviewed annually with Council. Vbase is a Council Controlled Trading Organisation (CCTO)
for the purposes of the Local Government Act 2002 and it is a fully owned subsidiary of Council.
Vbase owns, manages and operates a portfolio of venues that have been brought together under the
Vbase management and governance structure. On 1 July 2011, as a direct result of the February 2011
earthquake, Vbase entered into an agreement with the Council to have its business managed in-house by
the Council. This agreement expires on or before 30 June 2017.
DIRECTORY
Address: Vbase Limited
PO Box 13144
Christchurch 8041
Registered Office: 53 Hereford Street
Christchurch 8011
Directors: Tim Scandrett – Chair
Paul Lonsdale – Deputy Chair
Dr Karleen Edwards
Mary Richardson
Vbase Limited Statement of Intent Year Ending 30 June 2017 1
OBJECTIVES 3.1 VISION AND VALUES OUR STORY We are memory makers. As the largest venue and event company in Christchurch, we have an important role to play in making our city a more vibrant place. Because when we succeed, Christchurch succeeds. Organisers trust Vbase to deliver amazing events. Guests come to these events to enrich their lives and build memories that make up the great highlights of life. We deliver these through our portfolio of Christchurch’s most unique and iconic venues. Most importantly our awesome team are dedicated to making sure every guest has an amazing experience to remember. VISION We make life more eventful. VALUES At Vbase we live by five key values: Act as One We are one team with a single vision. Every success and every challenge is shared by all. Bring the Energy Love what you do. Energy is inspiring and infectious. Explore New Ways Embrace new ideas and constantly search for creative ways to enhance each experience. Show the Respect People always remember how you make them feel. Own the Experience Deliver with pride and be the best. Vbase Limited Statement of Intent Year Ending 30 June 2017 2
3.2 OUR CURRENT VENUE PORTFOLIO
VENUE
Concerts &
Performances, Trade & Expos,
Dinners & Dinners &
Trade & Expos, Sports,
Cocktail, Dinners & Cocktail,
TYPICAL
Dinners & Cocktails, Large Concerts,
EVENTS Special Events, Special Events,
Cocktails, Conferences & Small Meetings
Sports Meetings
Conferences Conventions
& Conventions
CAPACI
TY Up to 8,888 Up to 230 Up to 1,500 Up to 27,000 Up to 180
3.3 THREE YEAR OBJECTIVES
FINANCIAL SUSTAINABILITY
The 2010 and 2011 earthquakes had a devastating effect on the Vbase business and as a consequence
the company entered a Management Services Agreement with Council to have its ongoing management of
venues undertaken in-house by Council. The drivers for this were to reduce Vbase management costs and
to streamline the remediation work required to assets, including processing insurance claims.
The Council as 100% shareholder has confirmed it wishes Vbase to return to being an independently
managed and operated company. In order to do this the Vbase Board are mindful of the need to ensure
the company is operating in a financially sustainable way and delivers financial outcomes that are
acceptable to the Shareholder, balanced with the non-financial outcomes that it is asked to deliver for the
City.
The Vbase Board intend to provide the Council with a report outlining how this will be achieved. As
signalled to the Council previously, this will include the work that has been and continues to be progressed
in respect of the different operating and asset ownership structures, the aspiration being to ensure the
company:
• reduces its EBITDA deficit;
• is operating cash flow positive;
• is able to fund future capital expenditure; and
• has sufficient cash flow to service a level of debt if required.
Vbase Limited Statement of Intent Year Ending 30 June 2017 3
During the time period covered by this SOI, the Board will implement any deliverables to achieve the points noted above. TRANSITION MANAGEMENT OF BUSINESS OUT OF COUNCIL The Management Services Agreement between Council and Vbase expires on 30 June 2017 or earlier by agreement. The Board has already begun the process of the transition and will continue to do so in the 2017 financial year. Work has already begun on assessing the most suitable way of delivering information and communications technology for the company and this will shortly extend to financial, human resources and other such services. At this stage, and subject to any relevant approvals by the Council, the Board are aiming to complete the transition by October 2016, with a Chief Executive appointed by this time. This means that the agreement could be terminated earlier than June 2017. A separate report to Council will be provided in respect to this objective. The Board notes that there are likely to be human resource issues associated with the transition to Vbase becoming self-managed and as such the employing organisations will be required to undertake appropriate consultation with affected staff and employee representatives before implementation. TOWN HALL REPAIR AND RE-OPENING The Town Hall is owned by Vbase and its repair is being managed by Council. Construction works commenced on site in July 2015 and the building is due to be re-opened in mid-2018. Vbase has an important role to play to ensure that the Town Hall is operationally fit for purpose and as such will continue to work closely with the Council Town Hall project team, consultants and contractors. IMPLEMENT ASSET MANAGEMENT AND IMPROVEMENT PLANS As substantial progress is made in the recovery from the 2010 and 2011 earthquakes, one of the key objectives for Vbase is to ensure that its assets are not only fit for purpose but continue to be so for years to come, thereby continuing to be of benefit to the people of Christchurch. Horncastle Arena was built in 1998 and was originally developed as a sports arena with a view to developing the public and trade exhibition market in Christchurch as well as hosting the occasional entertainment event or concert. Pre-quakes, the Arena was hosting 200,000 patrons across 125 event days. It now hosts over 300,000 patrons with close to 200 event days and as such is getting considerably more wear. The event mix is also predominantly exhibitions, concerts or entertainment events with a few sporting events. Vbase is currently preparing an asset management plan for this building to ensure its continued operation. However the Board is also conscious that the event mix at the venue has changed over a period of time and may well do so again in the future. In the 2017 financial year Vbase will consider what needs to be changed, re-configured or improved to make Horncastle Arena more suitable to the current and future event mix and more attractive to event Vbase Limited Statement of Intent Year Ending 30 June 2017 4
promoters, with the aim of ensuring its longevity. Dependent on the outcome, this information may be developed into a plan to progressively develop and improve the Arena in the coming years. The ongoing asset management plan for the Town Hall will be considered at the latter stages of construction so that it is in place when the facility re-opens in 2018. Owing to the significant earthquake damage to Lancaster Park stands, which are owned by Vbase, there is no need to have an asset management plan for this facility. Vbase continues to keep this facility secure and maintained until such time as decisions are made in respect of its future. EMBED VISION AND VALUES THROUGHOUT THE ORGANISATION Over the last year the company vision and values have been refreshed. This has also been co-ordinated with a transition of the Vbase brand from being predominantly business to business to business to consumer. Over the coming twelve months and more, the vision and values will be embedded within the organisation. This will be undertaken through staff training as well as a new induction process for new staff. Staff engagement is also measured on an annual basis and this will be used as a barometer for checking that the vision and values are being positively adopted. ESTABLISH THE VBASE ACADEMY The Vbase Academy is in the process of being established. The vision for the Academy is for it to be a 'state of the art', robust training programme for every role in every department within Vbase. It will cover staff inductions and role specific modules, as well as aligning with staff career goals and creating pathways in the venue industry. Training comes not only from the managers, but also from the staff themselves as they become on-the-job trainers. The Academy will include a number of other initiatives as well as linking with formal qualifications. It is envisaged that it will take at least two years to have all modules and initiatives functioning under the Academy. The key purpose of the Academy is to enable Vbase to continue to deliver customer service excellence across the business. SUPPORT THE PROGRESS AND DEVELOPMENT OF STADIUM INFRASTRUCTURE The current AMI Stadium at Addington was built in 2012 as a temporary facility with a five year design life. As there is no alternative stadium infrastructure the life span for this facility must be extended, but that will result in a continuous need to replace or repair built elements or equipment. How long this facility can continue to be maintained is questionable. The temporary AMI Stadium has a number of shortcomings which means that not only is the patron experience lacking, but it is difficult to persuade promoters to bring more stadium-sized events to Christchurch. While Vbase has had recent success in attracting the Foo Fighters and Nitro Circus the Vbase Limited Statement of Intent Year Ending 30 June 2017 5
company estimates that in the last year Christchurch has lost out on stadium events which could have resulted in a $30 million to $50 million economic impact to the city. While the insurance settlement achieved by the Council is a significant milestone there is still much uncertainty around the future stadium infrastructure for Christchurch, including whether this will be a repair of Lancaster Park or a new venue. It is assumed, however, the planning and feasibility work for Christchurch's future stadium infrastructure will be undertaken within the duration of this SOI. Staff that work for Vbase have significant experience in managing as well as developing stadiums and the company is well placed with skills and expertise to support the progress and development of future Christchurch stadium infrastructure, be that a repaired Lancaster Park or new venue. Last year, Vbase also made clear its intention to be the operator of this venue and will work collaboratively with the Council, Government and other stakeholders to achieve this objective. DEVELOP A VENUE PORTFOLIO TO FIT THE STRATEGIC DIRECTION The Vbase venue portfolio will be developed to ensure that it supports the company objectives above, particularly in respect of financial sustainability. The core venues are those which Vbase has an ownership or controlling interest: Horncastle Arena, the Town Hall and, in the future, a new stadium or repaired Lancaster Park. For these venues, the company has a long term focus. The remaining venues in the portfolio are operated under management agreements with timeframes varying from 3 years to 10 years, which therefore result in a short to medium term focus. Decisions to continue operating these venues will need to be measured against the strategic fit with the company as and when each of the agreements are due to expire. If a decision is taken to continue it will be subject to acceptable renewal terms being agreed. Vbase will also seek out and act upon any new potential opportunities that arise to further develop the portfolio as long as they fit with the company objectives. Vbase Limited Statement of Intent Year Ending 30 June 2017 6
NATURE AND SCOPE OF ACTIVITIES Vbase undertakes three functions, which in most instances are all inter-related. It provides: venue management; event management services; and café operations supporting our venue portfolio. In addition to the above Vbase is also making an active contribution to the post-earthquakes rebuild and provides community support by making it possible for community groups to access the venues. 4.1 VENUE MANAGEMENT HORNCASTLE ARENA This venue is owned by Vbase and is used for large scale entertainment, cultural, exhibition and sporting events. In the absence of the Town Hall it is also fulfilling the role of a performing arts theatre in a reduced intimate mode setting. CHRISTCHURCH TOWN HALL The Town Hall is owned by Vbase. In June 2015 Council passed a resolution to repair it to 100% of New Building Standards. Construction work has commenced on site and Vbase continues to support the project to ensure it re-opens fit for purpose in mid-2018. The budget for the repair is $127.5 million, this is being funded by Vbase from the insurance settlement and issuing additional equity to Council. LANCASTER PARK Vbase continues to bear the costs associated with security and upkeep of this venue until a decision is made as to its future. AMI STADIUM ADDINGTON The assistance provided by Vbase in the development and continued management of AMI Stadium Addington was part of its, and Council’s, commitment to the community to provide a rugby stadium after the earthquakes. Vbase provides venue and event management services under a Management Services Agreement with the venue owner, the Christchurch Stadium Trust. The agreement is for a non-specified term and renews automatically each year. Vbase Limited Statement of Intent Year Ending 30 June 2017 7
AIR FORCE MUSEUM In February 2013 Vbase entered into a Management Services Agreement with Air Force Museum for the acquisition and management of events at this facility. The original agreement ended in January 2016, however a renewal has been negotiated with the RNZAF Museum Trust Board which sees the agreement extended until January 2019. ILEX CAFÉ & EVENTS , BOTANIC GARDENS In May 2014 Vbase and Council entered into a three-year Management Services Agreement to operate the function room and cafe at the new Botanic Gardens Visitor Centre, branded “ilex Cafe and Events”. This brand was developed and is owned by Vbase. Under this agreement, in November 2016 Vbase opened an ice cream and take-away café called "Duck Duck" in part of the former tea rooms which will be operational for the summer seasons. HADLEE PAVILION, HAGLEY OVAL In October 2014 Vbase entered a Management Services Agreement with the Canterbury Cricket Trust for the exclusive venue and event management of this building. The term of the Agreement is for ten years. Vbase also has an arrangement with Council to manage all international cricket matches at Hagley Oval. Vbase Limited Statement of Intent Year Ending 30 June 2017 8
4.2 EVENT MANAGEMENT Vbase carries out the full life cycle of event management services as shown in the diagram below. The company's team of Business Development staff work to attract events to the venues to deliver social and economic benefits to the people of Christchurch. Vbase also has the expertise and resources to successfully plan and deliver these events. This involves a team of event planners who work with our customers as well as both our front and back of house staff. As well as Hosting the events, Vbase has its own Catering department. 4.3 CAFÉ OPERATIONS Vbase has four hospitality cafés within its venue management portfolio: ilex Café and Duck Duck in the Botanic Gardens, Lot 55 at Horncastle Arena, and The Tuck Shop at the Air Force Museum. It is intended that the café at the Air Force Museum is rebranded in 2016 as The Tuck Shop brand is being returned to being a stadium retail brand. Vbase Limited Statement of Intent Year Ending 30 June 2017 9
4.4 CONTRIBUTION TO REBUILD Vbase understands that all events undertaken must maintain a high level of quality outcomes. This will help to maintain Christchurch as a quality destination and emphasise our commitment to clients during the rebuild period and beyond. The Vbase team has significant intellectual property in venue development and openings with members of the management team individually or collectively having been involved in the following: Hadlee Pavilion, Hagley Oval ilex Café & Events Air Force Museum AMI Stadium, Addington Christchurch Convention Centre Christchurch Town Hall Forsyth Barr Stadium, Dunedin Dunedin Centre and Town Hall Securing of sponsorships and naming rights In addition to the above, Vbase is also actively involved in the repair of the Town Hall. 4.5 COMMUNITY SUPPORT An important set of activities the company undertakes is delivering benefit to the community in which we operate. Along with providing assistance with the development of temporary and new venues during the earthquake recovery Vbase supports the community in the following ways: VENUE DISCOUNTS At the request of Council, Vbase provides support to community organisations by offering venue rental discounts. These can only be applied to the venues that Vbase owns, unless a venue owner gives specific permission in the case of an event at a managed venue. The venue rental discounts allow community groups to access venues they would not otherwise be able to afford. It is proposed that for the 2017 and 2018 financial years that Vbase continues to provide total discounts of $300,000 per year to groups meeting the criteria that Vbase set. However, with the Town Hall re-opening in 2018, there will not be the opportunity to deliver the same level of discounts as a number of the ‘resident’ community hirers will move from Horncastle Arena to the Town Hall. As rental rates for the Town Hall are proportionally lower than Horncastle Arena, the community discount available will reduce in the 2019 financial year. In providing these discounts it should be noted that Vbase will not make a commercial return on these events, they are instead a cost to the business, and will negatively impact the financial performance for the years. These are also not consistent with the financial sustainability objective. Vbase Limited Statement of Intent Year Ending 30 June 2017 10
SPONSORSHIPS The Vbase sponsorship portfolio allows the company to actively demonstrate our commitment to the local community through Vbase venues and event management. In recent years our commitments have covered a range of charitable and not-for-profit sectors including health, children, business and sport. In recognition of these solid and successful relationships the company has entered into long-term sponsorship agreements that offer profiling for Vbase as well as returning benefits to these organisations and their efforts in the community. Vbase regularly receives a number of requests for sponsorship and as much as we would like to assist everyone it is simply not possible to do so. Vbase will, however, continue to review its sponsorship portfolio on an annual basis. COMMUNITY OUTCOMES Vbase is conscious of attracting events to Christchurch that support the Council’s Community Outcomes for Christchurch particularly those that assist in: making Christchurch a great place to work, live, visit, and do business; ensuring that arts and culture thrive in Christchurch; people participate in a wide range of recreational activities and; assets, financial resources and infrastructure are well managed, now and in the future. Vbase Limited Statement of Intent Year Ending 30 June 2017 11
GOVERNANCE Subject always to the provisions in relation to acquisitions and disposals and other significant transactions set out in section 10.0 below, the Board is responsible for the strategic direction and control of the activities of the company. The Board guides and monitors the business and affairs of Vbase on behalf of the Shareholder, to whom it is accountable. The primary function of the Board is to ensure that Vbase meets its objectives and requirements as listed in the SOI. Additionally, the Board has obligations under the Local Government Act 2002 to deliver an annual Statement of Intent and relevant half-yearly and annual reports to the Shareholder. Appointments to the Board are confirmed by Council resolution. As discussed in section 3.0 above Vbase currently operates under a Management Agreement with the Council. The Management Agreement expires in June 2017 and there are provisions in the agreement to exit early. The Vbase Board has progressed a number of matters to ensure the seamless transition away from Council's direct management of the company, and is on target to achieve an earlier termination of the agreement. Vbase Limited Statement of Intent Year Ending 30 June 2017 12
PERFORMANCE TARGETS
6.1 FINANCIAL PERFORMANCE TARGETS
Vbase's key financial objective is to be financially sustainable. It is acknowledged that assets such as town
halls, entertainment and sporting arenas, and stadia do not provide a normal commercial level of return.
Vbase earns revenue from venue rental, food and beverage, naming rights, sponsorship, equipment hire,
ticketing and other categories. Major expense items are food and beverage materials, service and
management fees, business development, facilities costs, interest, insurance and depreciation.
The financial performance targets for Vbase are as follows:
2016/17 2017/18 2018/19
$000 $000 $000
Direct operating income 18,418 19,186 20,234
Direct Operating expenses 14,238 14,411 16,022
Net operating overheads and fixed costs 6,356 6,425 6,199
EBITDA (2,176) (1,650) (1,987)
Net profit / (deficit) after tax (48,460) (17,894) (3,051)
RATIO OF SHAREHOLDER FUNDS TO TOTAL ASSETS
The forecast ratio of Shareholder funds to total assets for the next three years is:
2016/17 2017/18 2018/19
Percentage 60% 57% 63%
FORECAST CAPITAL STRUCTURE
The forecast capital structure for the next three years is:
2016/17 2017/18 2018/19
$000 $000 $000
Issued shares and other equity instruments 189,636 214,580 216,349
Debt - 1,000 2,000
Total Assets 48,371 62,477 55,303
Total Equity 28,826 35,875 34,594
For accounting purposes, Vbase values its buildings at market value and depreciates all buildings, plant
and equipment. The value attached to buildings is reviewed annually for the preparation of the financial
statements and have been incorporated into the Vbase budget.
Vbase Limited Statement of Intent Year Ending 30 June 2017 13The following equity injections are forecast to be made by Council. These funds are required to fund the
repair of the Town Hall.
2016/17 2017/18 2018/19
$000 $000 $000
Equity injection by Council - 24,944 1,769
FACILITIES REBUILD
The forecast capital expenditure on the repair and rebuild of the Vbase’s owned venues is detailed below.
2016/17 2017/18 2018/19
$000 $000 $000
Facilitie s re build/re pair
Town Hall repairs 40,410 38,526 1,769
Arena 2,000 2,000 1,000
42,410 40,526 2,769
The Town Hall repairs are being funded from Vbase's insurance settlement in addition to equity injections
by Council. The Arena is being funded by cash on deposit and debt.
The construction of the new Stadium is not expected to begin until 2022/23 and is outside the timeframe of
this SOI.
6.2 OPERATIONAL PERFORMANCE TARGETS
In addition to the above financial performance measures, Vbase will report to the Shareholder on a
quarterly basis progress against each of the objectives stated in section 3.3. Vbase will also use the
following measures to assess its operational performance:
OBJECTIVE AND PERFORMANCE MEASURE
STRATEGY 2016/2017 2017/2018 2018/2019
1. Health and Safety - Vbase will be a safe place to work and visit
100% completion of 100% completion of 100% completion of
Provide leadership, H&S inductions for H&S inductions for H&S inductions for
policies and practices to contractors working at contractors working at contractors working at
clients, contractors and sub- Vbase venues Vbase venues Vbase venues
contractors
100% correction of 100% correction of 100% correction of
identified sub-standard identified sub-standard identified sub-standard
practices or conditions practices or conditions practices or conditions
Continue to improve health Annual health and Annual health and Annual health and
and safety processes safety audit completed safety audit completed safety audit completed
Vbase Limited Statement of Intent Year Ending 30 June 2017 14OBJECTIVE AND PERFORMANCE MEASURE
STRATEGY 2016/2017 2017/2018 2018/2019
Minimise incidents and near Less than 4.5 incidents Less than 4.0 incidents Less than 3.5 incidents
misses for staff and or near misses per or near misses per or near misses per
contractors 10,000 hours worked 10,000 hours worked 10,000 hours worked
Less than 2.5 incidents Less than 2.0 incidents Less than 1.5 incidents
Minimise incidents and near
or near misses per or near misses per or near misses per
misses for visitors
10,000 hours worked 10,000 hours worked 10,000 hours worked
2. Venue Utilisation
At least 90 events are At least 90 events are At least 65 events are
High utilisation of
delivered at Horncastle delivered at Horncastle delivered at Horncastle
Horncastle Arena
Arena Arena Arena
Attract events at AMI
At least 1 major event At least 1 major event At least 1 major event
Stadium outside of the
is delivered at AMI is delivered at AMI is delivered at AMI
standard Super rugby and
Stadium Stadium Stadium
provincial rugby fixtures
At least 170 events are At least 170 events are At least 80 events are
High utilisation of
delivered at Air Force delivered at Air Force delivered at Air Force
Air Force Museum
Museum Museum Museum*
High utilisation of At least 50 event days At least 50 event days At least 50 event days
Hagley Oval Pavilion within are delivered at Hagley are delivered at Hagley are delivered at Hagley
the constraints of use Oval Pavilion Oval Pavilion Oval Pavilion
At least 100 events are At least 110 events are At least 120 events are
High utilisation of
delivered at ilex delivered at ilex delivered at ilex
ilex function room
function room function room function room**
High utilisation of the At least 150 events are
Christchurch Town Hall for Not open Not open delivered at the Town
Performing Arts Hall***
3. Deliver Outstanding Service Delivery
Minimum 50 surveys Minimum 50 surveys Minimum 50 surveys
completed during the completed during the completed during the
Event Owner (Client)
year year year
satisfaction
Achieve greater than Achieve greater than Achieve greater than
80% satisfaction during 80% satisfaction during 80% satisfaction during
the year the year the year
Vbase Limited Statement of Intent Year Ending 30 June 2017 15OBJECTIVE AND PERFORMANCE MEASURE
STRATEGY 2016/2017 2017/2018 2018/2019
Minimum 600 guests Minimum 600 guests Minimum 600 guests
surveyed throughout surveyed throughout surveyed throughout
Event Customer (Guest)
the year the year the year
satisfaction
Achieve greater than Achieve greater than Achieve greater than
80% satisfaction during 80% satisfaction during 80% satisfaction during
the year the year the year
Minimum 500 guests Minimum 500 guests Minimum 500 guests
surveyed throughout surveyed throughout surveyed throughout
Retail Hospitality Customer
the year the year the year
satisfaction
Achieve greater than Achieve greater than Achieve greater than
80% satisfaction during 80% satisfaction during 80% satisfaction during
the year the year the year
4. Community Benefit
Facilitate access to venues
Total venue discounts Total venue discounts Total venue discounts
for local community and
equal $300,000 equal $300,000 equal $100,000
charitable organisations
Secure conferences and
conventions that bring Utilising Covec data, Utilising Covec data, Utilising Covec data,
visitors to the city to delegate spends in delegate spends in delegate spends in
generate positive economic excess of $8 million excess of $9 million excess of $10 million
impact
Secure events that will
Visitors to venues Visitors to venues Visitors to venues
encourage high usage of
exceed 450,000 exceed 500,000 exceed 600,000
the venues
5. Environmental Considerations
Ensure recycling of waste is Recycling undertaken Recycling undertaken Recycling undertaken
undertaken at events at 95% of events at 96% of events at 97% of events
Minimise the amount of
25% of waste by weight 26% of waste by weight 27% of waste by weight
general waste at Horncastle
is recycled is recycled is recycled
Arena
* The management contract with Air Force Museum expires in January 2019.
** Assumes the management contract for ilex café and events will be extended beyond its current expiry of May
2017.
*** The Town Hall is currently expected to re-open at the beginning of the 2018/19 financial year.
Vbase Limited Statement of Intent Year Ending 30 June 2017 16ACCOUNTING POLICIES
In 2015 Vbase reviewed its operations and objectives and determined that for the purposes of the New
Zealand Accounting Standards Framework that it was a For-profit entity.
Vbase is considered 'large' for the purposes of the New Zealand's financial reporting regime. As a result it
applies Tier 1 For-profit Accounting Standards. This tier of accounting standards requires the full
application of NZ IFRS accounting standards.
The accounting policies are consistent with the policies set out in the Vbase June 2015 Financial
Statements.
DISTRIBUTIONS
During the period of this SOI Vbase will not return capital funds to its shareholder.
INFORMATION TO BE REPORTED TO THE SHAREHOLDER
NO SURPRISES
Vbase will operate on a ‘no surprises’ basis in respect of significant Shareholder related matters, to the
extent possible in the context of commercial sensitivity and confidentiality obligations. Any sensitive issue
that could result in media attention or issues will be communicated to the shareholder as soon as possible.
The Board aims to ensure that the shareholder is informed of all major developments affecting the
company's state of affairs, while at the same time recognising commercial sensitivity may preclude certain
information from being made public. Within this constraint, information is communicated to the
shareholders through periodic reports, occasional briefings, regular reports and informal updates on
important issues.
LOCAL GOVERNMENT ACT 2002 REPORTING REQUIREMENTS
Vbase will provide information requested by the Shareholder in accordance with the requirements of the
Local Government Act 2002.
An annual report will be submitted to the Shareholder. The annual report will include audited financial
statements and such other details as are necessary to permit an informed assessment of the company’s
performance and financial position during the reporting period provided to the Shareholder.
Half yearly reports will also be provided to the Shareholder. These reports will contain unaudited
information and comply with NZ IAS 34.
The SOI will be submitted to the Shareholder for consultation annually, as required by the Local
Government Act 2002. The Directors will include any other information they consider appropriate. Where it
is necessary due to significant changes revised forecasts will be submitted to the Shareholder.
Vbase Limited Statement of Intent Year Ending 30 June 2017 17OTHER REPORTING
Quarterly reports will also be provided to the shareholder, which will include the financial and non-financial
performance of the company.
ACQUISITION/DIVESTMENT AND OTHER SIGNIFICANT
TRANSACTIONS POLICY
The subscription or acquisition of securities in any company or organisation, or a divestment of part of the
existing business, will only be considered where it is consistent with the long term strategic and
commercial objectives of Vbase.
When the subscription, acquisition or divestment is considered by Directors to be significant to Vbase’s
business operations, it will be subject to consultation with the Shareholder.
Major transactions as defined in the Companies Act 1993, s129(2), will be subject to Shareholder approval
by special resolution. The Board shall obtain the Shareholder's prior written approval before taking any
action or decision or making any proposal in relation to any of the following matters:
• Entry into any arrangement, contract or transaction outside the ordinary course of Vbase's business or
otherwise than on arm's length terms.
• Entry into any arrangement, contract or transaction for the purchase of materials, works and/or services
for an amount exceeding $500,000 where such materials, works and/or services are not budgeted for in
Vbase's annual budget and plan.
• The giving of notice of termination of any arrangements, contracts or transactions which are material to
Vbase's business, or materially varying any such arrangements, contracts or transactions.
Where Vbase decides to incorporate or subscribe for shares in subsidiaries to undertake its commercial
activities, the company will ensure effective management of that subsidiary. Control of any subsidiary is
exercised by Vbase directors and management.
Vbase Limited Statement of Intent Year Ending 30 June 2017 18COMPENSATION SOUGHT FROM LOCAL AUTHORITY
At the request of the Shareholder, Vbase may undertake activities that are not consistent with normal
commercial objectives. Specific financial arrangements will be entered into to meet the full commercial
cost of providing such activities.
Vbase may from time to time provide venue or event management services to Council or for the benefit of
Council or Christchurch as a whole. Recent examples include Cricket World Cup and Fifa U20 World Cup.
On such occasions Vbase will agree with Council any appropriate charges or reimbursement for the
services provided. Future examples could include a subsidy to assist with the costs to operate the Town
Hall.
Currently Vbase has entered into a number of arrangements which originated immediately post-
earthquake to provide stadium and conference facilities until the new conference centre and stadium were
built and the Town Hall repaired. These arrangements do not provide Vbase a normal commercial return.
The provision of these services allows events to be held in the city which provide a significant economic
benefit to the city and region. There are also holding costs associated with some non-operating venues.
The cost of Vbase of these arrangements is estimated below:
AMI Addington Stadium $400,000 per annum
Community Discount $300,000 per annum
Holding costs for the Town Hall $250,000 per annum
Holding costs for Lancaster Park $170,000 per annum
Total $1.12 million per annum
ESTIMATE OF COMMERCIAL VALUE
The Shareholder has recorded the value of its investment in Vbase Ltd in its accounts at 30 June 2015 as
$125.3 million and this is considered an appropriate estimation of the commercial value of the Company.
Vbase Limited Statement of Intent Year Ending 30 June 2017 19You can also read
