NZX Full Year Results and Annual Report 2016 published

NZX Limited
Appendix 1
Results for announcement to the market

Reporting Period 12 months to 31 December 2016
Previous Reporting
Period
12 months to 31 December 2015

Amount (000s) Percentage change
Revenue from ordinary
activities
$NZ 77,544 6.0%
Profit (loss) from
ordinary activities after
tax attributable to
security holder.
$NZ 9,182 (23.9%)
Net profit (loss)
attributable to security
holders.
$NZ 9,182 (61.5%)

Interim Dividends for
2016 year
Amount per security Imputed amount per
security
Interim first half 2016
dividend paid on 16
September 2016
$NZ 0.0300 $NZ 0.011667
Final Dividend for 2016
year
Amount per security Imputed amount per
security
Final second half 2016
dividend to be paid on
24 March 2017
$NZ 0.0300 $NZ 0.011667
Total 2016 dividend $NZ 0.0600 $NZ 0.023334

Record date Payment date
Interim first half 2016
dividend
2 September 2016 16 September 2016
Final second half 2016
dividend
10 March 2017 24 March 2017

Comments: For additional information please see financial
release and annual report attached.

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APPENDIX 7 – NZSX Listing Rules
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For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumberDate
Nature of event
BonusIf ticked,Rights Issue
Tick as appropriateIssuestate whether:Taxable/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
InterimYear
X
SpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
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be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceW ithholding Tax(Give details)
Foreign
FDP Credits
W ithholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date. In the case
of applications this must be the
last business day of the week.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
10 March, 201724 March, 2017
$0.005294
$8,049,471
Date Payable
24 March, 2017
N/A$0.002083$0.011667
$
Enter N/A if not
applicable
In dollars and cents
Ordinary SharesNZNZXE0001S7
04 498 227104 496 28931422017
$0.0300
EMAIL: announce@nzx.com
Notice of event affecting securities
NZX Limited
Bevan Miller - CFODirectors' Resolution

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NZX Limited
Annual Report
2016
Serving New Zealand’s
capital markets

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Contents
Chairman's Report..................................................04
CEO Report............................................................09
Management Commentary....................................12
Board of Directors..................................................24
Corporate Governance..........................................27
Directors' Responsibility Statement.......................34
Financial Statements..............................................35
Notes to the Financial Statements.........................40
Auditor's Report.....................................................68
Statutory Information.............................................72
Directory.................................................................78

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Chairman's
Report
Dear fellow shareholder,
On behalf of the Board, I am pleased to present
NZX’s Annual Report for 2016, and welcome this
opportunity to communicate with you, our shareholders.
NZX sits at the heart of New Zealand’s capital
markets. As the operator of the local stock exchange
it is a privilege to serve at the centre of this network
– and as the Chairman of NZX it is a role on which I
place tremendous importance.
2016 was a year of repositioning for NZX. The Ralec
litigation concluded, we reshaped our Agri business,
and transitioned our SuperLife and Smartshares
businesses to the Financial Markets Conduct Act
(FMCA). The costs associated with these activities
weighed on earnings. The Funds Services business
remains in an investment phase and the Agri business
did not meet expectations in a difficult market. As a
result, earnings for the year are well below the
Board's desired level. Nevertheless, our efforts during
the year created a solid foundation for future earnings
growth.
Market health
In a year headlined by global economic uncertainties
and volatility, the New Zealand equity market
remained in good health. This is evident in the
increase in the S&P/NZX 50 Index (Gross) which was
up 8.8% for the year to 31 December 2016. It is worth
noting that the five year return of this index to the end
of 2016 was 110.1%, which equates to an exceptional
compound annual growth rate over the same period
of 16.0% p.a.
1
This illustrates the strong performance of the New
Zealand market compared to major international
market indices, including the Hong Kong Hang Seng
Index (annualised return of 6.1% over the same five
year period), the Australian S&P/ASX 200
Accumulation Index (6.7%), the UK FTSE 100 Total
Return Index (6.7%), and the USA S&P 500 Total
Return Index (17.4%).
The 12 month forward weighted PE ratio for the New
Zealand market is currently 18.9x, which is 10% above
the five year historic average.
2
These combined
figures indicate that New Zealand’s capital markets
remain open for business, particularly during a period
of global economic uncertainty.
On this note, I am pleased to welcome Tegel Group
Holdings, NZME, Investore Property, New Zealand
King Salmon and Tilt Renewables, all of which listed
on the NZX Main Board in 2016.
1Source: Bloomberg
2Source: Forsyth Barr

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S&P/NZX 50 Index performance compared to S&P/ASX 200
and S&P 500 Indices
50
100
150
200
250
2012
2013
2014
2015
2017
2016
S&P/NZX 50 Index (Gross)
S&P/NZX 50 Index (Capital)
S&P/ASX 200 Index S&P 500 Index
Source: IRESS
Progress with creating stronger and deeper capital
markets is more graphically illustrated by the increase
in the ratio of equity market capitalisation to Gross
Domestic Product, which peaked at 50.1% in July.
This is a significant milestone given this ratio was as
low as 25.0% in February 2009 and in mid-2012 had
still only risen to 27.6%. In addition, our benchmark
index, the S&P/NZX 50 Gross Index exceeded 7,000
points for the first time in May.
NZX Equity Market Capitalisation
$140
$120
$100
$80
$60
$40
$20
$-
Dec-16
Dec-2015
Dec-2014
Dec-2013
Dec-2012
Dec-2011
NZX Equity Market Capitalisation (billions)
Source: NZX Data
The performance of New Zealand’s listed debt market
was another notable highlight of 2016. Debt market
capitalisation was up 29.7% to $25.7 billion following
the listing of $6.4 billion of new debt in 2016,
demonstrating that this product is meeting the needs
of the market extremely well, and highlighting its
attractiveness as a capital raising option for
corporates, banks and local and central government.
I would like to acknowledge the wide range of loyal
supporters of the market who have issued further debt
and welcome The Co-operative Bank who joined the
NZX Debt Market in 2016.
NZX Debt Market Capitalisation
$-
$5
$10
$15
$20
$25
$30
Dec-2011
Dec-2012
Dec-2013
Dec-2014
Dec-2015
Dec-2016
NZX Debt Market Capitalisation (billions)
Source: NZX Data
The above statistics are impressive and validate the
sustained run and competitive advantage of NZX’s
equity and debt markets. The markets have benefited
from several large, high quality companies listing,
raising capital and diversifying their funding sources
here in recent years, a low interest rate environment,
and the investment of significant KiwiSaver funds.
2016 in review
Financial performance
NZX’s Earnings Before Interest, Tax, Depreciation and
Amortisation (EDITDA) were $22.5 million in 2016, at
the bottom of the guidance range that NZX provided
in February 2016 and consistent with the update
provided in October 2016. Growth in operating
expenses of 13.3% reflected several one-time costs,
including professional fees for the Ralec litigation,
Financial Markets Conduct Act (FMCA) and CEO
transition costs, and the targeted investments made
in our Funds Services business.
Reported net earnings in 2015 included a gain of
$11.8 million realised on the sale of the Group’s 50%
stake in Link Market Services (NZ). Excluding this gain,
the decline in 2016 net earnings was 23.9%, reflecting
lower operating earnings, the loss on sale of
businesses sold during the year and increased
depreciation and amortisation expenses.

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I acknowledge the Group’s financial performance is
not satisfactory. It failed to meet the Board’s
expectations and those of our shareholders. The
Board and executive team are determined to drive
earnings growth for shareholders as we operate an
increasingly integrated set of businesses. Our 2017
earnings guidance reflects this.
More information about NZX’s 2016 financial and
operational performance is provided in the CEO
Report and Management Commentary.
Business performance
Our Markets business demonstrated pleasing growth
with revenue up 6.0% to $52.9 million, while operating
costs were down 4.5%. This operating leverage
resulted in 9.5% growth in segment earnings.
Our Fund Services business remained in investment
mode, reflecting the deliberate strategic investments
made to grow our SuperLife, Smartshares and NZX
Wealth Technologies businesses for the long-term.
The momentum of the Funds Services business
accelerated in Q3 when NZX Wealth Technologies
announced two major new clients, Craigs Investment
Partners and Hobson Wealth (formerly Macquarie
Equities New Zealand). These developments reinforce
the Board’s high-level of confidence in NZX’s decision
to increase its presence within the passive funds
management sector and the provision of funds
services infrastructure. The focus for this business in
2017 is on translating customer growth into earnings
growth.
It was a difficult year for NZX Agri, as we repositioned
our New Zealand and Australia businesses and market
conditions adversely impacted advertising revenues.
Our reshaped Trans-Tasman business now has a
greater focus on data and analytics, which have more
attractive earnings prospects and stronger linkages
to our Markets business.
In addition, we finally concluded the Ralec litigation
in November, which the Judge described as ‘a nil all
draw’. This litigation was again a drain on corporate
earnings and management attention in 2016. Although
we had hoped to resolve the matter without needing
to go to a costly trial, we are very pleased to have it
conclusively behind us, with all outstanding matters
resolved, and no further costs going forward.
With the key deliverables of the Ralec litigation, the
Agri business restructure, major client wins by NZX
Wealth Technologies and SuperLife and Smartshares’
transition to the FMCA (which required a significant
short-term investment of resources), all successfully
delivered in 2016, the stage has been set for a step
change in earnings in 2017.
As such, NZX expects full year 2017 EBITDA to be in
the range of $27 million to $30 million, compared to
$22.5 million in 2016. This represents expected
growth in EBITDA of 20% to 33%. This is subject to
market outcomes, particularly with respect to initial
public offerings, secondary capital raising, and equity
and derivatives trading volumes. This guidance
assumes no material adverse events, significant one-
off expenses or major accounting adjustments. It also
assumes no acquisitions or divestments.
Capital structure and dividend
The company continues to maintain a gearing position
that the Board considers is consistent with its role as
a systemically important financial institution at the
centre of the New Zealand capital markets. The Board
continues to monitor the company’s capital position
in light of the future growth potential of our
derivatives business, and contingent earnout
payments for previous acquisitions. The Board remains
comfortable with current capital levels.
The Board declared fully imputed dividends of 6
cents per share in respect of the 2016 year. While this
significantly exceeds the target payout ratio of 80%
of free cash flow in NZX’s current dividend policy, the
Board considers this to be an appropriate level of
payout in light of the non-recurring factors that
reduced 2016 earnings, and NZX’s balance sheet and
cash position. Total shareholder return for NZX in the
year to 31 December 2016 was 4.02%. As I mentioned
above, our share price underperformed in 2016.
Improving the Group’s future earnings and our share
price will continue to have the full focus of the Board
and executive team in 2017.

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Regulation and Policy update
The quality of NZX's regulatory function, core
technology and operations was formally recognised
in June when NZX received a clean bill of health from
the Financial Markets Authority (FMA) as part of its
annual Market Operator Obligations Review. It
concluded NZX complied with all of its market
operator obligations and was not required to take any
specific actions.
My thanks goes to our Head of Market Supervision
Joost van Amelsfort who has managed our
relationship with the FMA very well. We have seen a
huge improvement in NZX’s regulatory practices
under his leadership as he ensures the highest
standards are maintained.
Effective market regulation is a by-product of the
positive working relationship we have with the FMA
and Special Division. We are grateful for their efforts
and it is a privilege to serve our markets alongside them.
Under the leadership of Head of Policy and Legal
Hamish Macdonald, our policy team will shortly
publish the updated NZX Corporate Governance Best
Practice Code. This is the first substantive update to
the Code since 2003 and represents a significant step
forward in reducing fragmentation between various
reporting practices among Main Board listed issuers.
I am a strong supporter of listed companies exhibiting
good corporate governance as organisations can have
a huge impact on the communities in which they
operate. I hope this updated Code will lead to
increased investor education and confidence in the
broader marketplace. Feedback received as part of
this review exceeded our expectations. Thank you to
everyone who took the time to make a submission.
I would also like to acknowledge our former Minister
for Commerce and Consumer Affairs the Hon Paul
Goldsmith. On behalf of the Board, we have all
benefited from your open working relationship and
look forward to working with your successor the Hon
Jacqui Dean in 2017.
Looking forward
Our people
As the Board looks to 2017 we remain acutely aware
of the importance of not just running a well-
functioning exchange that operates fair, orderly and
transparent markets, but also a commercial business
that delivers profitable growth for shareholders.
To achieve this, the first half of 2017 will see the
Board focus on ensuring we have the right leadership
in place to make the best decisions to drive future
earnings growth. The Board has made good progress
in its search for a new CEO, engaging global
recruitment firm Korn Ferry to lead this process.
To ensure the characteristics of the successful
candidate meet the needs of NZX and the markets
we operate in, the Board appointed Propero
Consulting to survey 80 of its stakeholders to ensure
a very broad perspective on the skills needed for a
role at the heart of our capital markets.
Feedback consistently emphasised that the most
important leadership qualities were strong financial
acumen, the ability to create wealth and seasoned
judgement. Participants stated it was imperative the
CEO was empathetic to markets needs and committed
to working alongside stakeholders to build a healthy
marketplace at the core of our economy.
Proactive engagement with the market remains a
priority for the Board. Thank you to everyone who
completed the survey for your invaluable insights. We
will provide a further update to the market once the
recruitment process is finalised.
Given the timeframes associated with the search for
a new CEO, the Board appointed Head of Markets,
Mark Peterson, as Interim CEO, effective 1 January
2017. On behalf of the Board I would like to thank
Mark for leading NZX through this transition. Mark is
a capable leader with a passion for NZX. We are
confident that under his leadership earnings growth
will be delivered.
We farewelled Tim Bennett at the end of 2016
following his resignation as CEO in October. The
Board thanks Tim for his dedicated service.

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I would also like to acknowledge former Chief
Operating Officer Mandy Simpson and Head of
Corporate Affairs Kate McLaughlin, who left in
October 2016 and January 2017 respectively, for
their contribution to NZX.
Closing remarks
NZX recognises the importance of its position at the
heart of New Zealand’s capital markets network.
We operate in a dynamic industry and the Board are
grateful for the efforts of Mark Peterson and the
executive team who delivered several important
initiatives in 2016.
I would particularly like to thank all NZX employees
and their families for their commitment to the
organisation and enthusiasm.
I would also like to thank our customers, particularly
our listed issuers and market participants. We look
forward to working with you in 2017.
Finally, thank you to our shareholders for your loyal
support as the Board and executive team worked
through a year of significant transition. As our
guidance reflects, I am confident we will execute on
our growth opportunities and deliver growing profits
for shareholders in the years to come.
James Miller, Chairman

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CEO Report
To our shareholders,
On behalf of our staff, I am pleased to report on the
progress we have made over the past year.
There is little doubt that 2016 was a pivotal year for
NZX. A great deal was achieved to establish a
foundation for future earnings growth across the
Group and operate a more integrated set of
businesses going forward.
In January 2017, I took over as Interim CEO. I look
forward to making a broader contribution to the New
Zealand economy above and beyond my role as Head
of Markets.
While I am pleased to report on our progress, I want
to acknowledge the context in which our financial
results were achieved. In 2016, a significant amount
of cost and resource went into the Ralec litigation, our
transition to the Financial Markets Conduct Act
(FMCA), and the repositioning of our Agri business,
putting downward pressure on earnings. These
distractions are now behind us and our business is
well positioned for future earnings growth.
Our clear focus for 2017 is on driving profitable
growth from our existing businesses, serving our
customers, and delivering for our shareholders.
Below is a summary of our performance by business.
I hope you find our results encouraging.
Year in review
Markets
It was a good year for our markets business, which
produced sound financial results with revenues up
6.0% to $52.9 million, while operating costs were
down 4.5%, delivering 9.5% growth in segment
earnings. This result was underpinned by:
•The impressive growth of NZX's listed debt
market, with debt market capitalisation up 29.7%,
and the number of listed debt products up 20.2%
on the prior year;
•The number of equity trades, up 19.8% on 2015
as overseas investors turned to New Zealand in
search of lower volatility and higher yields;
•The performance of the S&P/NZX 50 Index, which
fared well despite ongoing global economic
uncertainties, up 8.8% as at 31 December 2016;
•The popularity of NZX’s Dairy Derivatives Market,
with participation (measured by the number of
active trading accounts) up 67.0% on 2015; and
•The launch and subsequent take up of NZ Milk
Price Futures and Options, with early trading in
these products exceeding expectations.
Technology remained a priority for the executive team
as we worked alongside market participants to
improve infrastructure as we prepare to deliver an
upgrade to our clearing system in 2017.
In addition to this, the executive team have a renewed
focus on improving operational efficiencies in 2017.

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This is to ensure our teams are efficiently supporting
the foundations we have put in place for future
earnings growth across the Group.
NZX Markets Revenue
60
50
40
30
20
10
0
2012
2013
201420152016
Full Year Revenue ($millions)
Source: NZX Data
Our policy team earned a great deal of positive
feedback from the broader market as we actively
engaged with stakeholders as part of NZX’s
corporate governance review. This feedback extended
to our regulation team who continued to work
diligently to ensure the operation of fair, orderly and
transparent markets. Both teams continue to pro-
actively address market trends, changes in technology
and law, and developments in international best
practice to ensure we are operating markets with a
strong reputation for integrity.
Funds Services
Our Funds Services business maintained good growth
momentum during 2016. This was evident in:
•Funds Under Management (FUM) growth in
SuperLife’s KiwiSaver business up 21.1% on the
prior year, while total SuperLife FUM increased
15.8%;
•SuperLife winning four new group corporate
superannuation mandates;
•Growth in direct retail sales of Smartshares
Exchange Traded Funds (ETFs) products, with
total external FUM up 10.7% on 2015;
•SuperLife and Smartshares completing their FMCA
compliance transition. While this impacted
segment earnings, these were one-off costs
associated with a significant regulatory change; and
•NZX Wealth Technologies securing two major new
clients. These were Hobson Wealth (formerly
Macquarie Equities New Zealand) and Craigs
Investment Partners, who will use the platform for
their KiwiSaver, superannuation and self-select
products. Both clients are expected to transition
onto the platform in the first half of 2017, bringing
approximately $2.5 billion in Funds Under
Administration.
Total Funds Under Management in SuperLife schemes
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
-
2017
2016
2015
2014
2013
2012
Funds Under Management ($billions)
Source: NZX Data
The SuperLife and Smartshares teams will now focus
tightly on marketing and generating earnings growth,
after spending much of 2015 on product
development, and 2016 on integration and
compliance. We are confident our Funds Services
business will grow significantly in 2017 as it moves out
of investment mode, and builds on its strategic
investments made in passive funds management over
the past two years.
Agri
Market conditions were difficult for NZX Agri, which
provided challenges for the publishing component
of this business in 2016. The performance of this
business is summarised below:
•Low commodity prices for dairy products
impacted farmer returns resulting in a 20.8%
reduction in paid advertising page equivalents,

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which directly correlated to a 20.1% reduction in
publishing revenues;
•Low advertising returns were also driven by
NZX's decision to exit the magazine publishing
and Clear Grain Exchange businesses, instead
focusing on parts of the Agri business that have
broader links to the markets we operate in; and
•While publishing revenue declined, total data
revenues grew 11.5% in 2016, driven by a 36.0%
increase in the New Zealand based AgriHQ and
iFarm revenue.
We believe steps taken to reshape NZX Agri in 2016,
with a stronger focus on data and analytics, have put
this business on a firmer financial footing, and position
it better for the long-term, especially as the outlook
for the dairy sector appears to be improving.
To lead our streamlined Agri business, we have
appointed Jeremy Anderson, effective 1 March 2017.
Jeremy joins NZX with broad experience from across
New Zealand and Australia’s agricultural sectors, and
we look forward to welcoming him to the Group and
growing this business.
Overall Group performance
A summary of NZX's Group financial performance is
below. More information is provided in the
Management Commentary.
•Revenues increased 6.0% to $77.5 million
•Operating expenses increased 13.3%, driven by
a mix of deliberate investments in NZX's Funds
Services business, and onetime FMCA regulatory
and CEO transition costs
•Earnings Before Interest, Tax, Depreciation and
Amortisation (EDITDA) of $22.5 million came
within the previously guided range
•Reported 2015 Net Profit included an
$11.8 million gain on sale of the Group's 50%
investment in Link Market Services (NZ). 2016 net
earnings were 23.9% down on the prior year
excluding this gain
Creating value
NZX plays a critical role in supporting the
development of New Zealand’s capital markets. To
be an effective player at the heart of this network our
team must proactively engage to address the needs
of our customers.
In 2017, our team remains focused on meeting the
needs of market participants, and seeking new ways
to engage and deliver. The team at NZX are
committed to continuing to build a collaborative
culture at the core of New Zealand’s markets
ecosystem. This is an NZX that engages, which seeks
feedback, and delivers in a timely and professional
manner. This is a market that needs to work for everyone.
I believe that if we can achieve this, then we can
achieve our underlying goal of improving returns for
our shareholders.
Acknowledgements
I would like to acknowledge the support I have
received from the Board and executive team as
Interim CEO and the positive working relationship
that has resulted.
It is a privilege to lead our team through this period
– a group of very capable, dedicated and talented
individuals. Thank you for your hard work.
A final word of thanks to our shareholders. I am
passionate about four things – customers, quality,
delivery and staff – and making the right decisions in
these areas will ensure better returns for you.
We have some fantastic opportunities in front of us
to grow NZX. I look forward to leading our business
and working with everyone involved.
Mark Peterson, Interim CEO

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Management
Commentary
Financial results for the year ended 31 December 2016
Overview
NZX’s reported earnings are summarised in the table below.
2016
$000
2015
$000
2014
$000
Change
2016 v 2015
Total revenue77,54473,15165,1896.0%
Operating expenses(55,027)(48,572)(40,588)13.3%
Earnings before net finance expense, tax, depreciation and
amortisation and gain on sale (Operating Earnings)
22,51724,57924,601(8.4%)
Net finance income(373)17087(319.4%)
Depreciation and amortisation(7,936)(6,990)(5,490)13.5%
(Loss)/gain on disposal of businesses and property, plant and
equipment
(467)(29)421510.3%
Gain on sale of associate-11,807-(100.0%)
Share of profit of associate-411673(100.0%)
Impairment expense(793)--NM
Adjustment to provision for earnout731--NM
Tax expense(4,497)(6,076)(6,802)(26.0%)
Net profit after tax – reported9,18223,87213,111(61.5%)
Earnings excluding Link gain9,18212,06513,111(23.9%)
Total revenues increased 6.0% as a result of an increase in activity levels in the capital markets (particularly
debt listing and securities trading), growth in funds management activities and a full year of wealth platform
fees, partly offset by a drop in advertising revenue in agri publications as a result of weak market conditions
in the dairy sector.
This revenue growth was more than offset by growth in operating expenses of 13.3%. A portion of the
$6.5 million growth in costs resulted from factors that related solely to 2016, including costs associated with
CEO transition and costs associated with the transition to the Financial Markets Conduct Act (FMCA) in the

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Funds Services business. The remainder of the increase was the result of a full year of costs of operating new
Exchange Traded Funds (ETFs) launched in 2015, a full year of NZX Wealth Technologies costs, and growth
in IT and employee costs.
The combined impact of these factors was a decline in EBITDA of 8.4%. Depreciation and amortisation
expense increased as a result of reclassifying some of the Group’s intangible assets as fixed life rather than
indefinite life assets, together with a full year of amortisation on software in NZX Wealth Technologies.
Reported net earnings declined by 61.5%. However, reported 2015 results included a gain of $11.8 million
realised on the sale of the Group’s 50% stake in Link Market Services (NZ). Excluding this gain, the decline in
net earnings was 23.9%.
Segment earnings
The breakdown of Operating Earnings by business segment is set out in the table below.
($000)
201620152014
Change
2016 v 2015
Segment earnings:
Markets41,06737,51236,1809.5%
Funds Services(316)1,726752(118.3%)
Agri8551,0401,303(17.8%)
Corporate(19,089)(15,699)(13,634)21.6%
Group Operating Earnings22,51724,57924,601(8.4%)
The Markets division saw earnings grow by 9.5% due to increased listings and transaction volumes, while
costs declined. Listings growth came from the debt market which saw a nearly 30% increase in market
capitalisation during the year, while the number of securities traded was up nearly 20%.
Funds Services earnings dropped by $2.0 million due to costs incurred during 2016 in order to achieve
compliance with the requirements of the FMCA, a full year of costs associated with NZX Wealth Technologies
and the new ETFs launched in 2015. Both NZX Wealth Technologies and a number of the new ETFs are
currently loss-making as they grow their customer base in order to achieve the necessary scale to reach profitability.
NZX’s Agri business was impacted by a downturn in the New Zealand agricultural sector. This flowed through
into a notable reduction in advertising volumes.
Corporate costs increased due to costs associated with the CEO transition, a $0.4 million short-term increase
in rent expense as the company reorganised its office accommodation, higher IT costs and increased employee
costs.
Revenue
Markets

Securities information revenue
Securities information revenue is derived from the sale of capital markets data to global data resellers, as
well as a broad range of subscription products to other participants in the capital markets. Sales to resellers

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represents the largest source of revenue within this category. These resellers incorporate this data into their
own subscription products delivered via data terminals. The reseller pays NZX based on the number of
terminal licences they have with their end customers that include NZX data. Thus the number of data
terminals is the most significant revenue driver for this category.
($000 unless otherwise stated)201620152014
Change
2016 v 2015
Securities information revenue10,40610,55810,406(1.4%)
Terminal numbers (12 month average)7,4077,2227,2912.6%
While terminal numbers increased 2.6%, a change in the mix of terminals towards lower value products
resulted in a small decline in data from securities terminals. A reduction in revenue from other data products
added to the decrease in securities information revenue.
Listing fees
There are three components to listing fees:
•Annual listing fees paid by equity and debt issuers on NZX’s securities markets. The primary drivers of
this revenue are the number of listed issuers and any changes in the fee schedule;
•Initial listing fees, which are paid by equity and debt issuers upon their initial listing on NZX’s securities
markets. The primary driver of this revenue is the number of new listings and the value of new capital
listed (as fees are based on the opening market capital of the newly listed entity); and
•Secondary issuance fees, which are paid by existing issuers when they raise additional capital through
placements, rights issues, the exercise of options, dividend reinvestment plans, further debt issues, etc.
The primary driver for this revenue is the value of secondary capital raised.
($000 unless otherwise stated)
201620152014
Change
2016 v 2015
Annual listing fees9,2268,5847,9367.5%
Initial listing fees2,3307642,800205.0%
Secondary issuance fees3,3414,0422,419(17.3%)
Total listing fees14,89713,39013,15511.3%
Number of listed issuers2322312150.4%
Equity market capitalisation$115.5b$110.2b$96.5b4.9%
Debt market capitalisation$25.7b$19.8b$13.2b29.7%
Number of new equity listings761916.7%
Value of new equity listed$2.1b$1.7b$4.7b24.5%
Value of new debt listed$6.4b$8.1b$1.7b(20.8%)
Total secondary capital raised$4.6b$12.9b$2.4b(64.2%)
Annual listing fees were up $0.6 million. More than half of this increase came from the debt market, where
there has been a substantial increase in the number and value of listed debt instruments over the past 18
months. The remainder of the increase resulted from growth in equity market capitalisation and changes to
the fee schedule increasing fees for existing issuers. While there were seven new equity listings in 2016 (three

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NZX Main Board IPOs, two NXT market IPOs and two new entities split out of existing issuers), several
delistings meant that the number of listed issuers was almost unchanged.
Initial listing fees increased $1.6 million. Although there was little increase in equity raising activity compared
to 2015, there was substantial listing of new debt products in 2016, which was the primary driver of the tripling
of initial listing fees. The $8.1 billion of debt raised in 2015 was mostly the result of the compliance listing of
$5.6 billion of existing debt by the Local Government Funding Authority, while in the current year new debt
listed reflected higher-value new debt issues.
Despite a 64.2% decrease in the value of secondary capital raised, secondary issuance fees only declined
17.3% ($0.7 million). The issuance fee as a percentage of capital raised decreases the larger a capital raising
is and 2015 secondary capital raising was dominated by a small number of very large capital raisings by dual-
listed Australian banks. By contrast, in 2016 secondary capital raising was spread over a number of smaller to
medium sized transactions which resulted in a higher yield as a percentage of capital raised.
Other issuer services
This revenue represents fees billed for time spent by NZX’s market supervision team reviewing listing and
secondary capital raising documents, requests for waivers from NZX Listing Rules and other significant issuer
matters.
($000)
201620152014
Change
2016 v 2015
Other issuer services revenue1,1447701,01348.6%
The increase in revenue resulted from more complex transactions occurring in 2016 coupled with the increase
in listing activity in the debt market.
Securities trading revenue
This represents fees billed for the execution of trades on NZX’s equity and debt markets. Trading fees are a
combination of a fixed fee per trade and a variable fee based on the value of the trade. The fixed fee
component accounts for approximately 70% of NZX’s trading revenues, hence the number of trades is the
most significant revenue driver.
($000 unless otherwise stated)
201620152014
Change
2016 v 2015
Securities trading revenue5,7654,9764,42415.9%
Number of trades1.75m1.46m1.31m19.8%
The number of securities traded increased just under 20% in 2016, which resulted in a corresponding increase
in fixed per-trade fees. Approximately 30% of securities trading revenue is derived from variable fees based
on the value traded which only increased only 5.5%, meaning the increase in total securities trading revenue
was lower than the growth in the number of trades.
Participant services revenue
This represents fees billed to broking and advisory firms who are accredited participants in NZX’s equity and
debt markets.

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($000)201620152014
Change
2016 v 2015
Participant services revenue3,5923,5263,4791.9%
Participant services revenues were stable, with no significant changes to fee structures or number of market
participants to whom these fees were charged.
Securities clearing revenue
This revenue represents fees for clearing and settlement activities and a range of related services such as
custody and stock lending undertaken by NZX’s subsidiary New Zealand Clearing and Depository
Corporation. The largest component is clearing fees, which are billed based on the value of the transactions
settled. Hence total value traded is the most significant revenue driver for this category.
($000 unless otherwise stated)
201620152014
Change
2016 v 2015
Securities clearing revenue5,6635,3654,6535.6%
Total value traded$44.0b$41.7b$35.0b5.5%
The increase in securities clearing revenue almost exactly reflected the growth in total value traded during the
year. The 5.5% growth in value traded was noticeably lower than the 19.8% increase in the number of trades
as much of the volume growth came from “algorithmic” trading, which is characterised by a large number of
low value trades.
Dairy derivatives revenue
This is trading, clearing and settlement fees for trading in NZX dairy futures and options. Fees are calculated
per lot traded, hence the total number of lots traded is the most significant revenue driver. These fees are
largely billed in USD reflecting the global nature of the market, hence changes in the NZD:USD exchange rate
also have an impact on reported revenues.
($000 unless otherwise stated)
201620152014
Change
2016 v 2015
Dairy derivatives revenue7066842543.2%
Lots traded198k214k101k(7.2%)
The number of lots traded declined 7.2% in 2016 due to low volatility through the first half of the year
reducing the incentive for buyers of dairy products to hedge their price exposure. This particularly manifested
in a significant reduction in the volume of milk powder options traded, which had been a significant driver of
volumes in 2015. Increased volatility in the latter part of 2016 saw trading momentum return somewhat.
Despite the fall in the number of lots traded, revenue increased 3.2% as a result of the weakening of the NZD
relative to the USD over the period.
Market operations revenue
NZX operates a number of aspects of the New Zealand electricity market under long term contracts from the
Electricity Authority and operates the Fonterra Shareholders' Market on behalf of Fonterra. Market operations
revenue has two components:
•Fixed annual fees for market operator contracts; and

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•Fees for development projects related to the market operator contracts, which are generally billed on a
time and materials basis.
($000)201620152014
Change
2016 v 2015
Development revenue1,4931,3752,5608.6%
Contractual revenue9,2369,2569,074(0.2%)
Total market operations revenue10,72910,63111,6340.9%
NZX successfully retendered in 2015 for the four market operator contracts that it has with the Electricity
Authority and the new contracts commenced in 2016. While the fees for the basic service operation decreased
in the new contracts, this was offset by additional annual contracted revenue for the enhancement of the
systems used to provide these services. Accordingly, the total contractual revenue was almost unchanged in 2016.
Development revenues also remained at similar levels to 2015, with a similar portfolio of development and
consulting activities undertaken in 2016.
Funds Services
Funds management revenue
NZX has two sources of funds management income:
•Funds management fees derived by SuperLife's superannuation and KiwiSaver activities. NZX acquired
SuperLife Limited effective 1 January 2015, which was amalgamated with Smartshares Limited in
November 2016. These fees are a mix of membership fees (a flat fee charged on a per member basis) and
Funds Under Management (FUM) fees (calculated based on a percentage of funds under management).
Thus the key revenue drivers are number of members and FUM.
•Funds management fees derived by Smartshares, a provider of ETFs. These fees are calculated as a
percentage of FUM, therefore FUM is the key revenue driver for Smartshares.
($000 unless otherwise stated)
201620152014
Change
2016 v 2015
SuperLife revenue7,0386,433-9.4%
Smartshares revenue4,5893,5622,71628.8%
Total funds management revenue11,6279,9952,71616.3%
SuperLife member numbers48,01543,713-9.8%
SuperLife FUM$1,660m$1,433m-15.8%
Smartshares external FUM$487m$440m$411m10.7%
Smartshares SuperLife FUM$1,218m$1,050m$88m16.0%
Total Smartshares FUM$1,705m$1,490m$499m14.4%
A combination of 15.8% growth in FUM and 9.8% growth in member numbers resulted in a 9.4% increase in
SuperLife revenue. SuperLife added 4,302 new members during the year. Three quarters of these were added
in November 2016 with the migration of new superannuation mandates to SuperLife. As they came on late in
the year, their impact on 2016 revenues was small, hence the growth in revenues is not as large as the growth
in year-end member numbers would suggest.

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Smartshares revenue increased 28.8% as a result of a full year of revenue from the new ETFs launched during
2015 compared to only a part year in the prior period, as well as growth in FUM during 2016 of 14.4%.
Wealth platform fees
Wealth platform fees are earned by NZX Wealth Technologies (formerly Apteryx), a business that NZX
acquired effective 1 July 2015. Fees are calculated based on the amount of Funds Under Administration
(FUA), therefore this is the key revenue driver for this business.
($000 unless otherwise stated)201620152014
Change
2016 v 2015
Administration fees1,365689-98.1%
Development fees40--NM
Total wealth platform fees1,405689-103.9%
FUA$1,292m$1,317m-(1.9%)
Growth in administration fees reflects 12 months of revenue in 2016 compared to only six months in the prior
year. FUA remained stable throughout 2016.
Development fees represent amounts payable by new customers for work to customise the NZX Wealth
Technologies platform for their requirements. This work is on track to be completed in the first half of 2017,
enabling the transfer of substantial additional FUA onto the platform.
Agri
Agri information revenue
This revenue falls into two categories:
•Publishing revenues – advertising and subscription revenues from the publication of rural newspapers and
magazines. Advertising is the most significant contributor to revenue and hence the volume of
advertising, measured by advertising page equivalents, is the most important revenue driver.
•Data revenues – revenue from the sale of subscription data and analytical products in the New Zealand
agri sector and Australian grain industry.
($000)
201620152014
Change
2016 v 2015
Publishing revenue6,4518,0698,953(20.1%)
Agri data revenue4,0383,6213,25111.5%
Total agri information revenue10,48911,69012,204(10.3%)
Total paid advertising page equivalents1,6792,1202,483(20.8%)
The adverse conditions that began impacting the New Zealand rural sector in 2015 persisted in 2016 with low
commodity prices for dairy products impacting farm returns causing advertisers to cut back their spending.
This was evident in the 20.8% reduction in paid advertising page equivalents which directly correlated with the
20.1% reduction in publishing revenues. Another factor in the reduction in paid advertising page equivalents
was the sale of the Group’s two remaining magazine titles, effective 1 October 2016.

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While publishing revenues declined, data revenues were up 11.5% as a result of strong growth in the New
Zealand business. New Zealand data revenues were up 36% due to growth in sales of existing products, the
development of AgriHQ Pulse (an online news service) and a full year of revenue from the iFarm business that
was acquired in 2015. Conversely, Australian data revenues declined 0.9% in reported NZD terms as a result
of a reduction in farmer subscribers and changes in the NZD:AUD exchange rate adversely impacting reported
NZD revenue.
Commodities trading revenue
This revenue came from trade fees on NZX’s Australian online grain trading market, the Clear Grain
Exchange. A fixed fee was billed per tonne traded on the exchange, hence the number of tonnes traded was
the primary driver of revenue.
NZX sold the Clear Grain Exchange effective 1 December 2016, so no grain trading revenue will be reported
in future periods.
($000 unless otherwise stated)
201620152014
Change
2016 v 2015
Commodities trading revenue1,1218771,25127.8%
Total tonnes traded543k452k595k19.9%
Higher tonnes were traded in 2016 relative to 2015 due to the 2015/16 harvest seeing a greater proportion
of grain sold later in the harvest (which fell into NZX’s 2016 financial year) than was the case in the previous
harvest. This resulted in a 27.8% increase in commodities trading revenue.
Operating Expenses
Personnel costs
Gross personnel costs are made up of:
•Wages and salaries, comprising base remuneration of permanent and fixed term employees, leave
expense, short-term incentive costs (bonuses and commissions), long-term incentive costs (employee
share schemes), ACC and KiwiSaver contributions;
•Contractor costs, comprising the cost of all individuals on short term contracts (including freelance
contributors to agricultural publications); and
•Other personnel costs, including training and development, recruitment and staff benefits.
Where employees or contractors are engaged on capital projects, a proportion of their time is capitalised to
capital work in progress, resulting in a credit to personnel costs.

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($000 unless otherwise stated)201620152014
Change
2016 v 2015
Wages and salaries(29,198)(24,424)(18,320)19.5%
Contractor costs(2,325)(2,138)(2,872)8.7%
Other personnel costs(1,185)(1,127)(1,034)5.1%
Gross personnel costs(32,708)(27,689)(22,226)18.1%
Less capitalised labour2,8551,63825174.3%
Reported personnel costs(29,853)(26,051)(21,975)14.6%
Staff numbers (FTEs)2372371880.0%
Wages and salaries costs increased by $4.8 million. Of this amount, $1.7 million related to NZX Wealth
Technologies with a full 12 months of expense in 2016 compared to six months in 2015, as well as additional
staff recruited to service major new clients won during 2016. The remainder of the increase was due to costs
associated with the CEO transition, additional staff recruited on a fixed term basis to support major projects
(the clearing system upgrade, the energy systems upgrade and the FMCA compliance project) and additional
leave accruals. This was offset by an increase in capitalised labour reflecting capitalisation of staff time on the
clearing system and energy projects as well as development work undertaken by NZX Wealth Technologies.
Contractor costs increased 8.7% due to additional contract resource engaged on energy projects and
increased use of contractors for covering short term vacancies.
Information technology costs
This includes software licence fees, software and hardware support and maintenance fees,
telecommunications and data network costs and the cost of IT services provided by third parties.
($000)
201620152014
Change
2016 v 2015
Information technology costs(7,303)(6,242)(5,828)17.0%
IT costs increased by $1.1 million. This increase resulted from increased costs of data feeds used in the
securities and agri data businesses, increased NZD cost of annual software maintenance fees billed in USD as
a result of changes in the exchange rate, additional software licence costs in the energy business that were
previously borne directly by the Electricity Authority, and miscellaneous price increases and additional
services acquired from external suppliers.
Professional fees
This includes legal expenses and advisory and consultancy fees.
($000)
201620152014
Change
2016 v 2015
Ralec litigation expenditure(2,984)(3,094)(956)(3.6%)
Other professional fees(2,609)(2,505)(2,481)4.2%
Total professional fees(5,593)(5,599)(3,437)(0.1%)
Ralec litigation costs were in line with the previous year. The trial was completed in 2016 with neither party
successful in its claim for damages. No further costs will be incurred in respect of this matter in future with an
agreement being reached that neither party would appeal the judgement.

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Other professional fees increased slightly by 4.2%. While 2015 costs included costs associated with the launch
of 16 new ETFs and the acquisition of Apteryx (now NZX Wealth Technologies) which were not repeated in
2016, this was offset by additional legal fees and other expenditure incurred in the FMCA compliance project
within the funds management business.
Marketing, print and distribution
This includes marketing and promotional expenditure and print and distribution costs for the Group’s
agricultural publications.
($000)201620152014
Change
2016 v 2015
Marketing, print and distribution(3,064)(3,549)(3,827)(13.7%)
Print and distribution costs declined in line with the reduction in agri publications revenue, as reduced
advertising volumes meant the production of smaller publications. The Group also sold its two remaining
magazine titles, effective 1 November 2016, and as a result there are only 10 months of print and distribution
costs for these publications in the current year compared to a full year in 2015.
Fund expenditure
This represents the cost of operating the Smartshares ETFs. They are a mixture of costs that are effectively
fixed in the short term (principally outsourced fund accounting and administration costs and registry fees) and
costs that vary in proportion to FUM (principally custodian fees, trustee fees, index fees, settlement costs and
third party manager fees).
($000)
201620152014
Change
2016 v 2015
Fund expenditure(3,660)(2,280)(1,063)60.5%
There were 16 new ETFs launched during the course of 2015 and the increase in costs was largely driven by
having a full year of the cost of operating these funds in 2016 as opposed to a part year in 2015. There was
also a further increase in variable costs due to 14.4% growth in total FUM between 31 December 2015 and
31 December 2016.
Other expenses
This comprises general and administrative expenditure, including rent, travel, insurance, directors fees, audit
fees and general overheads.
($000)
201620152014
Change
2016 v 2015
Other expenses(5,554)(4,851)(4,458)14.5%
The increase in other expenses was principally the result of a $0.4 million increase in rent and associated
premises costs. NZX had previously sublet approximately half its Auckland office to Link Market Services,
which moved to larger premises in 2016 to support business growth. NZX moved its SuperLife business into
this space however there was a period of approximately six months where NZX effectively incurred lease
costs on two premises. NZX also has surplus space in its Wellington offices that it subleases. This was vacant
for approximately half of 2016 during which time NZX was bearing the full rental cost.

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There was also an increase in statutory fees and compliance costs associated with the FMCA compliance
regime and an increase in doubtful debts expense, however these were largely offset by an increase in
capitalised overheads in line with the increase in labour capitalisation.
Other Income and Expenses
Net finance income/(expense)
This comprises net interest and foreign exchange gains/losses.
($000)201620152014
Change
2016 v 2015
Interest income9431,218615(22.6%)
Interest expense(1,233)(1,197)(407)3.0%
Net gain/(loss) on foreign exchange(83)149(121)(155.7%)
Net finance (expense)/income(373)17087(319.4%)
Interest income from cash and interest expense was relatively stable year on year. The $0.2 million decrease
in interest income largely resulted from use of money interest credits in 2015.
The largest factor in the change from net finance income in 2015 to a net finance expense in 2016 was the
foreign exchange loss recognised in 2016 compared to a gain recognised in 2015.
Gain/(loss) on disposal
($000)
201620152014
Change
2016 v 2015
Gain on disposal of associate-11,807-NM
Other (loss)/gain on disposal(467)(29)421510.3%
Total (loss)/gain on disposal(467)11,77842NM
NZX sold its 50% stake in Link on 30 June 2015 with a gain of $11.8 million recognised in 2015 on this sale.
In 2016, the Group sold its two rural magazine titles in New Zealand and the Clear Grain Exchange business
in Australia, realising a combined loss on disposal of these businesses of $469,000.
Depreciation and amortisation
($000)
201620152014
Change
2016 v 2015
Depreciation of PP&E(1,294)(1,189)(1,073)8.8%
Amortisation of intangibles(6,642)(5,801)(4,417)14.5%
Total depreciation and amortisation(7,936)(6,990)(5,490)13.5%
The increase in depreciation resulted from capital expenditure during the period.
Amortisation expense increased by $0.8 million. Of this amount $0.4 million results from a change in
classification of certain intangible assets in 2016 from indefinite lived (which are not amortised) to finite lived
(which are amortised). The remainder reflects amortisation of software development completed in 2015 and
2016 (principally by SuperLife and NZX Wealth Technologies).

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Impairment
($000)201620152014
Change
2016 v 2015
Impairment expense(793)--NM
In its half year results to 30 June 2016 the Group wrote down the carrying value of certain of its brand assets,
including those of the rural magazine publications that were subsequently sold. This resulted in an impairment
charge of $0.8 million.
Adjustment to provision for earnout
($000)
201620152014
Change
2016 v 2015
Adjustment to provision for earnout731--NM
NZX acquired Apteryx (which it subsequently renamed NZX Wealth Technologies) in 2015 for an initial
payment of $1.5 million. A further $2.5 million was payable in the event that the business achieved Funds
Under Administration of $3.0 billion and monthly revenues of $0.25 million by 31 March 2017. Based on a
probability assessment NZX recognised a provision for 50% of the earnout (discounted to present value) at
31 December 2015.
The earnout targets will not be met and accordingly the earnout provision has been reversed in 2016 resulting
in a credit to earnings of $1.3 million.
Offsetting this is an adjustment to increase to the provision for the SuperLife earnout, to record an increase
in the likelihood of the full earnout being paid to 95% (previously accrued at 90%).
Share of profit of associate
($000)
201620152014
Change
2016 v 2015
Share of profit of associate-411673(100.0%)
The share of profit of associates came from NZX’s 50% interest in Link. This ceased upon the sale of the Link
stake on 30 June 2015.
Tax expense
($000 unless otherwise stated)
201620152014
Change
2016 v 2015
Tax expense(4,497)(6,076)(6,802)(26.0%)
Effective tax rate (excluding non-assessable gain on disposal of Link)32.9%33.5%35.4%(1.9%)
The decrease in tax expense reflects lower earnings before tax. The effective tax rate is higher than the
statutory rate of 28% due to the significant expenditure on the Ralec litigation which is not deductible for tax
purposes.

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Board of
Directors
As at 31 December 2016
1. James Miller
CHAIRMAN: BCOM, FCA
James Miller, NZX Chairman, was appointed to the
Board in August 2010. James is a director of Mercury
(formerly Mighty River Power), ACC and Auckland
International Airport. He was previously on the ABN
AMRO Securities Board, INFINZ Board, and Financial
Reporting Standards Board. James brings 14 years’
direct experience in the New Zealand capital markets
with Craigs Investment Partners, and prior to that ABN
AMRO and Barclays de Zoete Wedd. James is a
qualified chartered accountant and is a Fellow of the
Institute of Chartered Accountants of New Zealand, a
Certified Securities Analyst Professional and an
accredited director of the Institute of Directors in NZ
Inc. He holds a Bachelor of Commerce from Otago
University and is a graduate of The Advanced
Management Program, Harvard Business School (USA).
James is a member of NZX's Human Resources
Committee, and an ex officio member of the Audit and
Risk Committee.
2. Neil Paviour-Smith
BCA, FCA, AFA, ACIS, FCFIP, MSAA
Neil Paviour-Smith is Managing Director of Forsyth
Barr and a director of various related companies. He
is also a director of Chartered Accountants Australia
New Zealand and a Councillor of Victoria University
of Wellington.
He has more than 25 years’ experience in the New
Zealand securities and funds management industries.
Neil is an NZX Adviser and an Authorised Financial
Adviser, a Fellow of the Institute of Finance
Professionals NZ Inc (INFINZ) and former Chairman
of the NZ Society of Investment Analysts. He is a
Fellow Chartered Accountant, an accredited Master
Stockbroker of the Stockbrokers Association of
Australia and a member of the Institute of Directors,
Governance New Zealand and the CFA Institute.
Neil is Chair of NZX's Audit and Risk Committee and
a member of the Human Resources Committee.
3. Alison Gerry
MAPPFIN, BMS (Hons)
Alison Gerry became an NZX director in February
2012. She has been a professional director since 2007
and is currently on the boards of Spark, Infratil, Vero
and Wellington Airport. Alison has more than 20
years' experience working for both corporates and
financial institutions in Auckland, Sydney, Hong Kong,
Tokyo and London in trading, finance and risk roles.
Alison was also a Visiting Fellow at Macquarie
University in Sydney for 12 years until 2011. Alison has
a first class honours degree in Management Studies
from Waikato University and a Masters of Applied
Finance from Macquarie University.
Alison is Chair of the Board of wholly owned NZX
subsidiary New Zealand Clearing and Depository

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1
2
4
3
5
6

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Corporation Limited, a member of the Regulatory
Governance Committee and member of the Human
Resources Committee.
4. Dame Therese Walsh
DNZM, BCA, FCA
Dame Therese Walsh joined the Board in February
2013. She is a professional director and is currently
Deputy Chairperson of TVNZ, a director of ASB Bank
Limited and Air New Zealand Limited, a Trustee of
Wellington Regional Stadium, and is a Victoria
University Council Member. She also sits on a number
of Government panels, including the Major Events
Investment Panel. Previously she was Head of New
Zealand for the ICC Cricket World Cup 2015, and
Chief Operating Officer for Rugby New Zealand 2011.
She has been a director of New Zealand Cricket and
Save the Children NZ, a member of the New Zealand
Rugby Union executive team, and held a senior role
with KPMG.
Dame Therese is a qualified chartered accountant, and
a Fellow of the Institute of Chartered Accountants of
New Zealand. She holds a Bachelor of Commerce and
Administration from Victoria University.
She is a member of NZX’s Audit and Risk Committee,
the Regulatory Governance Committee, and Chair of
the Conflicts Committee.
5. Jon Macdonald
BE (Hons)
Jon Macdonald joined the Board in May 2013. Jon is
CEO of NZX/ASX listed Trade Me Group. Jon has a
background in engineering and technology. He joined
Trade Me in 2003 and was appointed CEO in 2008.
Prior to joining Trade Me, Jon worked in London for
HSBC Investment Bank in a variety of technical and
management positions, and has worked for Deloitte
Consulting with a focus on telecommunications and
financial services. He is a Trustee of NZ Technology
Training Charitable Trust.
Jon has a Bachelor of Engineering (Hons) from the
University of Canterbury.
Jon is Chair of NZX's Human Resources Committee,
and a member of the Conflicts Committee and the
Regulatory Governance Committee.
6. Dr Patrick Strange
BE (Hons), PHD
Dr Patrick Strange joined the Board in May 2015.
Patrick has spent 30 years working as a senior executive
and director in both private and listed companies,
including more than six years as Chief Executive of
Transpower, where he oversaw Transpower’s
$3.8 billion of essential investment in the National
Grid. Previously, he had also been Chief Executive of
Vector.
Patrick holds a doctorate in civil engineering from the
University of Auckland, and worked in increasingly
senior roles in Europe and the USA before returning
to New Zealand.
Patrick is Chair of Chorus, and a director of Mercury
(formerly Mighty River Power), Auckland International
Airport and of Endeavour Energy and Essential Energy
in Australia.

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Corporate
Governance
Corporate Governance environment
By virtue of the industries in which it operates and its critical role within New Zealand's capital markets, the
NZX Group is subject to a more complex corporate governance environment than most New Zealand
listed companies.
The overarching regulatory and compliance framework within which the NZX Group operates is summarised
in the table below.
Company/division
Principal source of
compliance obligations
Regulator/oversightExternal assurance activities
NZX Limited (as a listed entity)Companies Act, FMCAFMAAnnual statutory audit by
KPMG
NZX Main Board Listing RulesSpecial DivisionOngoing Special Division
surveillance and the Tribunal
annual report on Special
Division activities
Capital marketsFMCAFMAMarket Operator
Obligations Review by FMA
Capital markets – clearing houseRBNZ designationRBNZ and FMA jointlyAnnual operational audit of
clearing house by KPMG
Funds managementFMCAFMA
Fund trust deedsSupervisorAnnual compliance report to
Supervisor by KPMG
EnergyElectricity Authority Industry
Participation Code
Electricity AuthorityAnnual compliance audits by
various external providers
As a listed entity, NZX is required to comply with the NZX Main Board Listing Rules (the Rules) (including in
relation to the Exchange Traded Funds (ETFs) managed by its wholly owned subsidiary Smartshares Limited).
For all other listed entities, NZX is charged with the monitoring and enforcement of compliance with these
Rules. As NZX cannot regulate itself, the monitoring and enforcement of NZX’s own compliance with the
listing rules is undertaken by the Special Division, an independent division of the New Zealand Markets
Disciplinary Tribunal (the Tribunal). Members of the Special Division are appointed by the Chair of the
Tribunal and confirmed by the Financial Markets Authority (FMA).

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Corporate Governance framework
NZX Board
Management
Subsidiary
Boards
Board
Committee
Audit and
Risk
Human
Resources
Regulatory
Governance
Conflicts
CEO
Smartshares
NZCDC
Other
subsidiaries
Head of
Market
Supervision
Head of
Compliance
Other
Executives
Head of Funds
Management
Head of Market
Operations
Against this backdrop, the NZX Group's governance framework is summarised in the diagram above.
NZX Board
The Board is responsible for the overall direction and
strategy of NZX. It appoints the Chief Executive and
delegates the day-to-day operation of NZX’s business
(excluding NZX’s regulatory functions) to the Chief
Executive.
As at 31 December 2016, the Board comprised
six directors, all of whom were non-executive
directors and all of whom were independent directors
in accordance with the Rules, with the exception of
James Miller, who was non-independent by virtue of
also being a director of Accident Compensation
Corporation, which is a substantial product holder in
NZX. The directors are James Miller (Chair),
Neil Paviour-Smith, Alison Gerry, Dame Therese
Walsh, Jon Macdonald and Dr Patrick Strange. Profiles
of directors are provided on page 24.
In accordance with NZX’s constitution and the Rules,
one third of the directors are required to retire
by rotation every year and may offer themselves for
re-election by shareholders. Nominations for
directors may also be made in accordance with NZX’s
constitution.
The Board holds regular scheduled meetings. The
Board also holds ad hoc meetings to consider time
sensitive or specific issues (including via teleconference).
The Board has access to executive management, who
are invited to attend and participate in appropriate
sessions of Board meetings.
Directors may seek their own independent
professional advice to assist with their responsibilities.
The Board has established a Code of Ethics that
provides a set of principles for directors to apply in
their conduct and work for NZX. The principles include
the management of conflicts of interest, the required
skills of directors, trading in NZX’s shares,
and maintaining confidentiality of information received
in their capacity as directors of NZX.
The Board has in place a Conflict Management Policy.
The purpose of this policy is to identify possible
conflicts that might arise between NZX’s commercial
and regulatory roles and to describe the processes in
place at a management and Board level to ensure
that these potential conflicts are appropriately managed.
Board Committees
The Board has four standing committees: the Audit
and Risk Committee, the Regulatory Governance
Committee, the Human Resources Committee and the
Conflicts Committee. No additional remuneration has
to date been paid to any director for additional duties
associated with membership of any committee. The

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non-director members of the Regulatory Governance
Committee and the Conflicts Committee are paid
separate fees for their services on these committees.
The terms of reference for each of the Board
committees can be downloaded at: www.nzxgroup.
com/investor-centre/corporate-governance
Information on attendances at committee meetings
during 2016 is disclosed in a table on the next page.
Audit and Risk Committee
The purpose of the Audit and Risk Committee is to
assist the Board with financial reporting and corporate
financial matters. The Audit and Risk Committee also
assists the Board in fulfilling its risk management
responsibilities, other than with respect to regulation
which is addressed by the Regulatory Governance
Committee and clearing house risk which is addressed
by the Board of New Zealand Clearing and
Depository Corporation Limited. The Audit and Risk
Committee also oversees internal and external
audit processes.
The Audit and Risk Committee may only comprise
independent directors and at least one member must
have expertise in accounting or a financial
background. As at 31 December 2016, the members
of the Audit and Risk Committee were: Neil Paviour-
Smith (Chair), Dame Therese Walsh and Dr Patrick
Strange. Neil Paviour-Smith and Dame Therese Walsh
are considered by the Board to have expertise in
accounting and a financial background.
The Audit and Risk Committee has a clear line of
communication with the independent external auditor
(KPMG), independent internal auditor (EY) and the
internal finance and audit team, and it may, at its
discretion, meet with the independent auditors
without management being present.
Regulatory Governance Committee
The Regulatory Governance Committee’s core
function is to assist the Board with its governance
responsibilities relating to NZX’s regulatory function.
The Committee does not have any authority to make
regulatory decisions and is not involved in day-to-day
operations, management, or decision making except
where specific delegations of authority may be made
by the Board. No such delegations were made in the
financial year to 31 December 2016.
The Regulatory Governance Committee comprises
non-executive directors and an independent non-
director member (Derek Johnston). As at 31 December
2016, the members of the Regulatory Governance
Committee were: Derek Johnston (Chair), Alison
Gerry, Jon Macdonald and Dame Therese Walsh.
Human Resources Committee
The core function of the Human Resources Committee
is to ensure that human resource policy and practices
support NZX in achieving its commercial and
stakeholder goals.
As at 31 December 2016, members of the Human
Resources Committee were Jon Macdonald (Chair),
Alison Gerry, James Miller and Neil Paviour-Smith.
Conflicts Committee
The Conflicts Committee’s core function is to monitor
the adequacy of the company's conflicts
arrangements and make recommendations to the
Board on conflicts management policies and
procedures, including recommendations to address
any perceived or actual conflicts of interest between
NZX’s regulatory responsibilities and its
commercial interests.
The Conflicts Committee is appointed by the NZX
Board, and comprises directors who are deemed by
the Board to be sufficiently independent of conflicts
in relation to NZX Group activities and an
independent non-director member (David Flacks, who
is also chairman of the Tribunal). The members of the
Conflicts Committee are Dame Therese Walsh
(Chair), Alison Gerry, Jon Macdonald and David Flacks.

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2016 Board and Committee attendance
Board
Audit and Risk
Committee
Regulatory
Governance
Committee
HR
Committee
Conflicts
Committee
James Miller8/8––3/3–
Neil Paviour-Smith8/84/5–3/3–
Alison Gerry7/8–4/43/31/2
Dame Therese Walsh8/84/54/4–2/2
Jon Macdonald8/8–4/43/32/2
Dr Patrick Strange8/85/5–––
Derek Johnston––4/4––
David Flacks––––2/2
The Chief Executive is not a member of any Committee but attended a number of meetings as an invited attendee.
Management
The Chief Executive is responsible for implementing
policies and strategies set by the Board and is
accountable to it. The Chief Executive and senior
management operate under specific delegations of
authority from the Board. In October 2016 the Chief
Executive resigned, effective 31 December. NZX has
appointed an Interim Chief Executive while a search
for a new Chief Executive is undertaken.
The Board has made a separate direct delegation to
the Head of Market Supervision in respect of NZX’s
regulatory functions. Accordingly, the Head of Market
Supervision has a direct reporting line to both the
Chief Executive (in respect of operational matters) and
the Board (in respect of regulatory matters).
In addition, the Head of Compliance is responsible for
ensuring that NZX’s compliance frameworks and
policies remain fit for purpose and that these are duly
followed in practice.
NZX’s Head of Funds Management has a direct line
of reporting to the Chief Executive as well as a
secondary line of reporting to the Board of Smartshares.
During 2016 the Chief Operating Officer role was
replaced by a Head of Market Operations role. NZX's
Head of Market Operations has a direct line of
reporting to the Chief Executive as well as a
secondary line of reporting to the Board of New
Zealand Clearing and Depository Corporation Limited
in respect of the activities of the NZX Group's clearing
house.
Profiles of all the senior managers of NZX are
available at: www.nzxgroup.com/who-we-are/
management-profiles
Insurance and Indemnification
NZX provides insurance cover and indemnities to
directors and executive employees. Further detail is
set out on page 73.

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Gender and Diversity
NZX is committed to building and maintaining
diversity of skills and perspectives across the
organisation. We believe that diversity of thought at
all levels, in an inclusive environment, leads to
improved outcomes for our employees, our
customers and our shareholders. The NZX Diversity
Policy requires:
•Transparent, merit-based, recruitment and reward
decisions;
•Identification and support of talented individuals;
and
•Use of flexible work practices to encourage broad
workforce participation.
NZX established a Diversity and Inclusion employee
committee in 2016. Its objective is to implement
improved diversity and inclusion initiatives across the
organisation.
As part of NZX’s annual employee engagement
survey, measurements are taken on employees’ views
of NZX as an equal opportunity employer and as an
employer that cares about its employees’ wellbeing.
The results of this survey are reported to the Board.
The Diversity Policy does not set quantitative targets
for workforce composition, but does require an age
and gender breakdown to be provided to the Board
quarterly. The Board will consider whether further
measurement is appropriate over time and will
consider updates to the current policy as part of
transitioning to the updated NZX Corporate
Governance Best Practice Code.
The gender balance of NZX directors, officers and all
permanent employees (excluding officers) for the
years ended 31 December 2016 and 2015 was as
follows:
31 DECEMBER 2016
31 DECEMBER 2015
DirectorsNumber%Number%
Female233%233%
Male467%467%
Total6100%6100%
Officers
1
Female218%218%
Male982%982%
Total11100%11100%
All employees
Female11047%10946%
Male12453%12954%
Total234100%238100%
1 An officer means a person, however designated, who is concerned or takes part in the
management of the issuer's business, but excludes a person who does not: a) report
directly to the Board; or b) report directly to a person who reports to the Board.

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The board has evaluated NZX's performance against
its 2016 diversity objectives.
ObjectiveEvaluation
Key people managers will
receive diversity training.
Achieved.
Senior management are due
to complete refresher
training in 2017.
HR metrics based on gender and
age will be presented to the
Board quarterly for their
consideration.
Achieved.
Further, the Human
Resources Committee
reviewed the diversity policy
and its application across all
of the organisation.
Management will consider
whether there are other
measures which may be
appropriate for understanding
the composition of the NZX
workforce and, if such measures
are identified, will present these
to the Board for its consideration.
Achieved.
Although no additional
measures have
currently been identified, this
will continue to be
kept under review.
NZX will undertake a review to
ensure that remuneration is fair
and equitable across all levels of
the organisation to minimise
inadvertent discrimination.
Achieved.
In addition to internal
assessments,
NZX continued to utilise the
services of the Hay Group to
provide independent
benchmarking.
During 2016 NZX undertook the
Gallup Work Survey. This
included a question on whether
staff consider NZX an equal
opportunity employer.
In addition, a survey question
was asked about employees
overall work satisfaction.
Achieved.
72% of all NZX employees
either agreed or strongly
agreed that NZX was an
equal opportunity employer.
A rating of 3.76 out of a
possible 5 was achieved.
Governance Policies
As noted above, the Board has adopted a Code of
Ethics, Delegated Authority Policy and Diversity
Policy. In addition to these policies, the Board has
adopted a formal Securities Trading Policy and
Conflict Management Policy.
Securities Trading Policy

NZX has a Securities Trading Policy to assist in
compliance with insider trading provisions of the
FMCA. The policy is administered by NZX’s Chief
Financial Officer. The policy restricts directors and
officers trading in a number of ways including:
•Prohibiting trading by NZX senior managers and
directors in NZX’s securities during “black-out”
periods set out in the policy. These occur prior
to the release to the market of NZX financial
results and prior to the release to the market of
any prospectus for a general offer of securities
issued by NZX or a subsidiary of NZX (excluding
Smartshares).
•If a director, or officer or employee of NZX
wishes to trade NZX securities outside a blackout
period, that person must first apply for and
obtain, consent from NZX’s Corporate Counsel.
•If the Chief Executive wishes to trade NZX
securities, additional arrangements, including
approval by the Chair of the Board apply.
Because of the nature of NZX’s business, any
employee who wishes to buy or sell any financial
product listed on NZX’s markets must follow the
policy and apply for consent to trade. This policy is
reinforced through individual employment agreements.
Conflict Management Policy

As a licensed market operator, NZX is required to
undertake the supervision of the markets that it
operates. This dual role as market operator and
regulator may lead to a perception of conflict between
NZX’s regulatory and commercial functions.

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For this reason, it is important for NZX to effectively
and demonstrably manage any conflicts that might
arise between its commercial and regulatory roles.
Accordingly, NZX has developed a Conflict
Management Policy. The purpose of this policy is to
identify possible conflicts and to describe the
processes in place at a management and Board level
to manage potential conflicts.
NZX staff receive training on both NZX's securities
trading policy and conflict management
arrangements periodically. Copies of both policies can
be downloaded at: www.nzxgroup.com/investor-
centre/corporate-governance
Other Governance practices

Nominations
Given the size of the Board, there is no nominations
and succession committee. Rather the full Board is
involved in the director nomination process.
Disclosure
NZX has internal procedures to ensure that key
financial and material information is communicated
to the market in a clear and timely manner. In addition
to its disclosure obligations under the Rules, NZX has
adopted a quarterly revenue reporting regime and
produces operating metrics monthly. This additional
information is intended to provide transparency and
assist the market in evaluating NZX’s performance.
NZX also maintains a website which provides contact
points for the public, and is updated with information
regarding NZX, and its releases. This information is
available at: www.nzxgroup.com/investor-centre/
reports-information
Corporate social responsibility
NZX has outlined its approach to corporate social
responsibility on the corporate governance section
of its website: www.nzxgroup.com/investor-centre/
corporate-governance/corporate-social-responsibility
Risk management

The Board is responsible for ensuring that key
financial and business risks are identified and
appropriate controls and procedures are in place to
effectively manage those risks.
Corporate Governance best practice
NZX is committed to ensuring it employs best practice
governance structures and principles in keeping with
Appendix 16 of the NZX Main Board Listing Rules (the
Rules) and the Corporate Governance in New Zealand
Principles and Guidelines published by the FMA in
December 2014. As noted above, during 2015 - 2016
NZX undertook extensive industry consultation to
update its current version of Appendix 16 which is
planned for publication in 2017. NZX will be
undertaking a process to update its policies and
practices to reflect the new corporate governance
standards and this will be reflected in future reporting.

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Directors'
Responsibility
Statement
The directors are responsible for the preparation, in
accordance with New Zealand law and generally
accepted accounting practice, of financial statements
which give a true and fair view of the financial position
of NZX Limited and its subsidiaries (the NZX Group)
as at 31 December 2016 and the results of their
operations and cash flows for the year ended
31 December 2016.
The directors consider that the financial statements
of the NZX Group have been prepared using
accounting policies appropriate to the NZX Group’s
circumstances, consistently applied and supported
by reasonable and prudent judgments and estimates,
and that all applicable New Zealand Equivalents to
International Financial Reporting Standards have been
followed.
The directors are pleased to present the financial
statements of the NZX Group for the year ended
31 December 2016.
The financial statements were authorised for issue for
and on behalf of the directors on 13 February 2017.
J B Miller
Chairman of Directors
N Paviour-Smith
Director and Chairman
of Audit and Risk
Committee

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Financial
Statements
Income Statement ....................................................................36
Statement of Comprehensive Income .....................................37
Statement of Changes in Equity...............................................37
Statement of Financial Position ................................................38
Statement of Cash Flows..........................................................39
Notes to the Financial Statements
1.Reporting entity and statutory base...................................40
2.Intangible assets.................................................................42
3.Goodwill.............................................................................43
4.Impairment tests.................................................................44
5.Segment reporting.............................................................46
6.Loss on disposal of businesses and property, plant and
equipment..........................................................................47
7.Impairment expense...........................................................48
8.Adjustment to provision for earnout..................................48
9.Operating revenue.............................................................48
10.Operating expenses...........................................................49
11.Funds held on behalf of third parties.................................50
12.Gain on sale of associate ...................................................50
13.Taxation..............................................................................51
14.Earnings per share..............................................................52
15.Bank overdraft and cash flow reconciliation.......................53
16.Receivables and prepayments............................................54
17.Property, plant and equipment...........................................55
18.Trade payables...................................................................56
19.Other liabilities...................................................................56
20.Term loan............................................................................57
21.Shares on issue...................................................................57
22.Dividends............................................................................58
23.Share based payments.......................................................58
24.Financial instruments .........................................................59
25.Related party transactions..................................................65
26.Lease commitments as lessee............................................66
27.Contingent liabilities...........................................................66
28.Capital commitments.........................................................66
29.Subsequent events.............................................................67

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36The accompanying notes form an integral part of these financial statements
Income Statement
For the year ended 31 December 2016
Note
2016
$000
2015
$000
Operating revenue
Securities information10,40610,558
Listing fees14,89713,390
Other issuer services1,144770
Participant services3,5923,526
Securities trading5,7654,976
Securities clearing5,6635,365
Dairy derivatives706684
Market operations10,72910,631
Commodities trading1,121877
Agri information10,48911,690
Wealth platform fees1,405689
Funds management11,6279,995
Total operating revenue977,54473,151
Operating expenses
Personnel costs(29,853)(26,051)
Information technology(7,303)(6,242)
Professional fees10(5,593)(5,599)
Marketing, printing and distribution(3,064)(3,549)
Funds expenditure(3,660)(2,280)
Other expenses10(5,554)(4,851)
Total operating expenses(55,027)(48,572)
Earnings before net finance income, income tax, depreciation, amortisation and
impairment, adjustment to provision for earnout, share of profit of associate, gain
on sale of associate and loss on disposal of business and property, plant and
equipment
22,51724,579
Interest income9431,218
Interest expense(1,233)(1,197)
Net (loss)/gain on foreign exchange(83)149
Net finance income(373)170
Loss on disposal of businesses and property, plant and equipment6(467)(29)
Depreciation and amortisation expense(7,936)(6,990)
Impairment expense7(793)-
Adjustment to provision for earnout8731-
Gain on sale of associate12-11,807
Share of profit of associate-411
Profit before income tax13,67929,948
Income tax expense13(4,497)(6,076)
Profit for the year9,18223,872
Earnings per share
Basic (cents per share)143.49.1
Diluted (cents per share)143.49.0

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The accompanying notes form an integral part of these financial statements37
Statement of Comprehensive Income
For the year ended 31 December 2016
2016
$000
2015
$000
Profit for the year9,18223,872
Other comprehensive income recognised through equity
Foreign currency translation differences5(14)
Total other comprehensive income5(14)
Total comprehensive income for the year9,18723,858
Statement of Changes in Equity
For the year ended 31 December 2016
Note
Share
Capital
$000
Retained
Earnings
$000
Translation
Reserve
$000
Total Equity
$000
Balance at 1 January 201529,97520,92718751,089
Profit for the year-23,872-23,872
Foreign currency translation differences--(14)(14)
Total comprehensive income for the year-23,872(14)23,858
Transactions with owners recorded directly in
equity:
Dividends paid22-(15,834)-(15,834)
Issue of shares2110,000--10,000
Share based contingent consideration215,000--5,000
Dividend accrued on contingent consideration shares-(248)-(248)
Share based payments212,341--2,341
Cancellation of non-vesting shares21(88)50-(38)
Total transactions with owners recorded directly in
equity
17,253(16,032)-1,221
Balance at 31 December 201547,22828,76717376,168
Profit for the year-9,182-9,182
Foreign currency translation differences--55
Total comprehensive income for the year-9,18259,187
Transactions with owners recorded directly in
equity:
Dividends paid22-(16,094)-(16,094)
Issue of shares2169--69
Share based payments21345--345
Cancellation of non-vesting shares21(86)86--
Total transactions with owners recorded directly in
equity
328(16,008)-(15,680)
Balance at 31 December 201647,55621,94117869,675

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38The accompanying notes form an integral part of these financial statements
Statement of Financial Position
As at 31 December 2016
Note
2016
$000
2015
$000
Current assets
Cash and cash equivalents30,80440,293
Funds held on behalf of third parties1170,84761,786
Receivables and prepayments1615,92311,569
Total current assets117,574113,648
Non-current assets
Non-current receivables16-1,827
Property, plant & equipment173,2593,507
Goodwill335,76435,764
Other intangible assets237,36739,001
Total non-current assets76,39080,099
Total assets193,964193,747
Current liabilities
Funds held on behalf of third parties1170,84761,786
Trade payables185,6325,882
Other liabilities1913,80313,588
Current tax liability135912,113
Total current liabilities90,87383,369
Non-current liabilities
Non-current other liabilities199,0938,272
Term loan2020,00020,000
Deferred tax liability134,3235,938
Total non-current liabilities33,41634,210
Total liabilities124,289117,579
Net assets69,67576,168
Equity
Share capital47,55647,228
Retained earnings21,94128,767
Translation reserve178173
Total equity attributable to shareholders69,67576,168
Net tangible assets per share (cents per share)-1.280.53
Included within the cash and cash equivalent balance at 31 December 2016 is $20.0 million (31 December
2015: $20.0 million) that is held for risk capital requirements by the Clearing House and is not available for
general cash management use by the Group.

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The accompanying notes form an integral part of these financial statements39
Statement of Cash Flows
For the year ended 31 December 2016
Note
2016
$000
2015
$000
Cash flows from operating activities
Receipts from customers74,78472,688
Net interest received77178
Payments to suppliers and employees(53,463)(48,038)
Income tax paid(7,824)(6,533)
Net cash provided by operating activities1513,57418,295
Cash flows from investing activities
Receipts from associate-850
Proceeds from the sale of associate56313,800
Cash (paid)/acquired on acquisition/disposal of businesses(541)59
Payments for property, plant and equipment(1,105)(2,097)
Payments for intangible assets(5,886)(3,440)
Acquisition of businesses-(11,500)
Net cash used in investing activities(6,969)(2,328)
Cash flows from financing activities
Proceeds from term loans-20,000
Dividends paid22(16,094)(15,834)
Net cash provided by/(used in) financing activities(16,094)4,166
Net increase/(decrease) in cash and cash equivalents(9,489)20,133
Cash and cash equivalents at the beginning of the year40,29320,160
Cash and cash equivalents at the end of the year30,80440,293
Cash comprises:
Cash at bank20,80432,793
Bank deposits10,0007,500
Net cash and cash equivalents and bank overdraft30,80440,293
Included within the cash and cash equivalent balance at 31 December 2016 is $20.0 million (31 December
2015: $20.0 million) that is held for risk capital requirements by the Clearing House and is not available for
general cash management use by the Group.
Of the $20.0 million proceeds from term loans in 2015, $10.0 million was used to fund the acquisition of
SuperLife Limited, with the remaining $10.0 million used to fund the $10.0 million increase in Clearing House
risk capital.

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Notes to the
Financial Statements
For the year ended 31 December 2016
1. Reporting entity and statutory base
Reporting entity

These financial statements are for NZX Limited (the Company) and its subsidiaries (together referred to as the
Group).
The Group operates New Zealand securities, derivatives and energy markets, including building and
maintaining the infrastructure on which they operate. It provides funds management services including
superannuation and Exchange Traded Funds (ETFs), as well as building and operating wealth management
platforms for other providers. It also provides a range of information and data to support market growth and
development in the securities and agricultural sectors.
The Company is incorporated and domiciled in New Zealand, registered under the Companies Act 1993 and
is an FMC reporting entity under the Financial Markets Conduct Act 2013 (FMCA). These financial statements
have been prepared in accordance with that Act and the Financial Reporting Act 2013. The Company is listed
and its ordinary shares are quoted on the NZX Main Board.
Basis of preparation

These are the Group financial statements for the year ended 31 December 2016. They have been prepared
in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with New
Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable Financial
Reporting Standards, as appropriate for profit oriented entities. The financial statements also comply with
International Financial Reporting Standards (IFRS).
The measurement basis adopted in the preparation of these financial statement is historical cost, modified
by the revaluation of certain financial instruments as identified in the accompanying notes. These financial
statements are presented in New Zealand Dollars ($), which is the Company’s functional currency. All financial
information presented in New Zealand Dollars has been rounded to the nearest thousand, except when
otherwise indicated.

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Basis of consolidation

The Group financial statements are prepared by consolidating the financial statements of all the entities that
comprise the Group, being the Company and its subsidiaries. Consistent accounting policies across the
parent and all subsidiaries and associates are employed in the preparation and presentation of the Group
financial statements.
i.Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group. On acquisition, the assets, liabilities and contingent
liabilities of a subsidiary are measured at their fair values at the date of acquisition. In determining the fair
value of assets acquired, NZX assesses identifiable intangible assets including brands, intellectual property,
software, management rights and any other identifiable intangible assets using recognised valuation
methodologies and with reference to suitably qualified experts. Any excess of the cost of acquisition over the
fair values of the identifiable net assets acquired is recognised as goodwill.
ii.Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.
In preparing the Group financial statements all intercompany balances and transactions, and unrealised
profits arising within the Group are eliminated in full.
iii. Investment in associates
Associates are all entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting and are initially recognised at cost. The Group’s share
of its associates' post-acquisition profits or losses is recognised in the Income Statement. Since the sale of its
investment in Link Market Services Limited in June 2015, the Group has no investment in associates.
Accounting policies

Accounting policies that summarise the measurement basis used and are relevant to the understanding of the
financial statements are provided throughout the accompanying notes.
The accounting policies adopted have been applied consistently throughout the periods presented in these
financial statements.
There are no new standards, amendments or interpretations that have been issued and are not yet effective,
that are expected to have a significant impact on the Group.
Accounting estimates and judgements

The preparation of the financial statements in conformity with NZ IFRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported

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amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected. The principal
areas of judgement, including information about assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment within the next financial year, for the Group in preparing
these financial statements are set out in:
•note 2 - intangible assets
•note 3 - goodwill
•note 23 - share based payments
2. Intangible assets
Intangible assets are initially measured at cost. The direct costs associated with the development of software
and website assets for internal use are capitalised where success is probable and the capitalisation criteria of
NZX's accounting policy and NZ IFRS are met. The cost of intangible assets acquired in a business
combination is their fair value at the date of the acquisition. Intangible assets with a finite life are amortised
from the date the asset is ready for use on a straight-line basis over its estimated life which is as follows:
•Software and websites: 3-9 years
•Management rights: 20 years
At each reporting date, the Group reviews the carrying amounts of its intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. This is outlined in note 4 below.
Where estimated useful lives or recoverable values have diminished due to technological change or market
conditions, amortisation is accelerated.

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Software
and
websites
$000
Brands,
Trademarks
and rights to
use Brands
$000
Data
archives,
customer
lists,
databases,
and other IP
$000
Management
rights
$000
Intangible
work in
progress
$000
Total
$000
Gross carrying amount
Balance at 1 January 201537,6547,9063,1322,34438451,420
Additions--255-3,2633,518
Disposals(133)----(133)
Acquired on acquisition of businesses2,273--15,772-18,045
Transfer from WIP1,276---(1,276)-
Balance at 31 December 201541,0707,9063,38718,1162,37172,850
Additions198---5,7625,960
Disposals(10,161)----(10,161)
Transfer from WIP2,406---(2,406)-
Balance at 31 December 201633,5137,9063,38718,1165,72768,649
Accumulated amortisation &
impairment
Balance at 1 January 201523,0754,982---28,057
Amortisation expense5,016--789-5,805
Disposals(13)----(13)
Balance at 31 December 201528,0784,982-789-33,849
Amortisation expense5,474208167793-6,642
Impairment expense-793---793
Disposals(10,002)----(10,002)
Balance at 31 December 201623,5505,9831671,582-31,282
Net Book Value
As at 31 December 201512,9922,9243,38717,3272,37139,001
As at 31 December 20169,9631,9233,22016,5345,72737,367
3. Goodwill
Carrying amount
2016
$000
2015
$000
Balance at beginning of the year35,76413,233
Acquired on acquisition of SuperLife Limited-20,730
Acquired on acquisition of Apteryx business-1,494
Acquired on acquisition of other business-307
Balance at end of the year35,76435,764
A cash generating unit (CGU) to which goodwill has been allocated is tested for impairment annually, and
whenever there is an indicator of impairment based on the performance of the CGU relative to expected
future performance and other relevant factors. For the year ended 31 December 2016, the directors have

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reviewed the carrying value of goodwill for impairment and determined that no impairment exists. A
description of the impairment tests carried out and the key assumptions used is set out in note 4.
4. Impairment tests
Indefinite life intangible assets are reviewed for impairment annually. They are also reviewed for impairment
whenever there are indicators of impairment, as are finite life intangible assets.
A summary of the CGUs to which intangible assets have been allocated as at 31 December 2016 is outlined below:
Software &
websites
$000
Other finite
life
intangible
$000
Indefinite
life
intangible
$000
Work in
progress
$000
Total other
intangible
$000
Goodwill
$000
TOTAL
$000
Cash generating unit
Clearing House3,873--3,8877,760-7,760
Agri541,777-211,8522,4894,341
Grain Information Unit2631,7746-2,0433,0095,052
Funds Management96214,1922,3441317,51120,72938,240
Wealth Technologies960--1,1542,1141,4943,608
Energy826--5731,3997,7209,119
Direct data181261,458-1,6023231,925
Other
Other intangible assets477---477-477
Other computer software2,530--792,609-2,609
9,96317,8693,8085,72737,36735,76473,131
Impairment test

For the year ended 31 December 2016, the directors have reviewed all intangible assets for impairment using
discounted cash flow analysis, comparable EBITDA multiple analysis and/or other factors as appropriate to the
asset being tested. All impairment tests have been undertaken on a value in use basis.
Key assumptions used in the calculation of recoverable amounts in discounted cash flow analysis are
consistent with those used and disclosed in the financial statements for the year ended 31 December 2015
unless indicated otherwise. Discounted cash flow analysis using a forecast period of five years was used for
all CGUs, other than Agri where a ten year forecast period was used, and Energy where a forecast period of
eight years was used to match the remaining contractual period. The analysis also used an independently
assessed WACC of 10.35% (2015: 10.4%) for New Zealand CGUs and 12.76% (2015: 12.3%) for Australian
CGUs (and were stress tested at higher rates). A terminal growth rate of 2.0% p.a. has been used to
extrapolate cash flow projections beyond five years in New Zealand and 2.5% p.a. in Australia. Management
has assessed the long term economic outlook data available, and assessed that the use of a 2% p.a. and 2.5%
p.a. terminal growth rate in 2016 were appropriate, consistent with the prior year. Where relevant, EBITDA
multiples were used to cross-check the discounted cash flow analysis for established businesses.
The review of the carrying values of goodwill and intangible assets has determined that all the CGUs have
recoverable amounts exceeding their carrying values. Therefore no impairment charges are required at

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31 December 2016. An impairment expense of $793,000 on Agri brand assets was recognised in the current
financial year as a result of impairment testing completed at the 30 June 2016 half year reporting period (refer
note 7).
Further information on specific assumptions underlying the CGU discounted cash flow analysis is set out below.
a.Clearing House
Other than the general assumptions outlined above, the principal assumption on which the discounted cash
flows for this CGU are dependent is the future revenue growth rate. Future revenue growth is dependent on
growth in equity and dairy derivatives markets. Growth in equity markets has been forecast based on
historical growth rates, while dairy derivatives are expected to trade within a range of 3% to 36% (2015: 5%
to 25%) of their respective underlying markets by the end of the forecast period (currently this range is 1% to
8%). This assumption is based on trading statistics for similar derivative products in overseas markets.
b. Agri
Other than the general assumptions outlined above, the principal assumption on which the discounted cash
flows for the Agri CGU is dependent is the future revenue growth rate which is assumed to be up to 10%
during the explicit forecast period. The Company considers this reasonable based on historical experience.
The value of the Agri information business was cross checked against the EBITDA multiples of listed media entities.
c.Grain Information Unit
Other than the general assumptions outlined above, the principal assumption on which the discounted cash
flows for the Grain Information Unit CGU are dependent is the future revenue growth rate which is assumed
to be 2%. The Company considers this reasonable based on historical experience.
d. Funds Management
Smartshares Limited acquired the management rights for SmartOZZY, SmartMOZY, and the SmartMIDZ funds
for a total value of $2,344,000. These are held in the Group accounts with an indefinite life, as there is no
expiry date for these rights and they are expected to apply indefinitely. Additionally the acquisition of
SuperLife Limited has resulted in additional management rights acquired of $15,772,000, which are held in the
Group accounts as a finite life asset to be amortised over 20 years and goodwill of $20,730,000. Other than
the general assumptions outlined above, the principal assumption on which the discounted cash flows are
dependent is the future level of funds under management which is assumed to grow between 10.0% pa to
20.0% pa during the explicit forecast period.
e.Energy
The carrying value of the Energy CGU is comprised mainly of a goodwill amount of $7,720,000. This business
has a significant reliance on service provider contracts it has in place with the Electricity Authority (EA) which
were renewed in late 2015 for the eight year period 1 May 2016 to April 2024, with the EA having an option
to renew for a further 3 years. As a result of this renewal, NZX has certainty of minimum cash flows to be
received over the contract period which, and along with additional uncontracted consulting revenue, support
the current carrying value of the CGU.

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5. Segment reporting
The Group has three revenue generating segments, as described below, which are the Group‘s strategic
business areas, and a Corporate segment which has no revenue but includes all costs that are shared across
the organisation. In prior periods the Group had five reportable segments and the change to three distinct
groups is to better reflect each business's growth prospects and investment requirements. The reportable
segments are:
•Markets - operator and regulator of securities and derivatives markets and provider of trading, post-trade
and data services for securities and derivatives, as well as the provider of a central securities depository.
It also includes the Fonterra Shareholders' Market and the energy markets business, which comprises the
contracts operated on behalf of the Electricity Authority;
•Funds Services - provider of superannuation, KiwiSaver and Exchange Traded Funds (ETF) and funds
administration platforms; and
•Agri - provider of information, news, data and analysis relating to the agriculture sectors in New Zealand
and Australia through printed publications and online services.
The Group’s CEO (the chief operating decision maker) reviews internal management reports for each of these
strategic areas on a regular basis. The Group’s revenue is analysed into each of the reportable segments.
Expenses incurred are allocated to these segments only if they are direct and specific expenses to one of the
three segments. The remaining expenses that relate to activities shared across the group are reported in a
Corporate segment.
The Group's assets and liabilities are analysed into each of the revenue generating segments, apart from
those assets and liabilities that are utilised on a shared basis, which are allocated to the Corporate segment.
Segmental information for the year ended 31 December 2016
Markets
$000
Agri
$000
Funds
Services
$000
Corporate
$000
Total
$000
Operating revenue52,90211,61013,032-77,544
Operating expenses(11,835)(10,755)(13,348)(19,089)(55,027)
Total segment result41,067855(316)(19,089)22,517
Segment assets123,36011,99146,82211,791193,964
Segment liabilities(77,788)(2,012)(15,525)(28,964)(124,289)
Net assets45,5729,97931,297(17,173)69,675

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Segmental information for the year ended 31 December 2015
Markets
$000
Agri
$000
Funds
Services
$000
Corporate
$000
Total
$000
Operating revenue49,90212,56710,682-73,151
Operating expenses(12,390)(11,527)(8,956)(15,699)(48,572)
Total segment result37,5121,0401,726(15,699)24,579
Segment assets110,48015,22544,70223,340193,747
Segment liabilities(68,329)(2,763)(16,015)(30,472)(117,579)
Net assets42,15112,46228,687(7,132)76,168
Geographical information
In presenting information on the basis of geographical segments, segment revenue is based on the
geographical location of customers. Segment non-current assets are based on the geographical location of the
assets.
Revenue
2016
$000
2015
$000
New Zealand63,00059,838
Australia6,1396,402
Other8,4056,911
Total revenue77,54473,151
Non-current assets
2016
$000
2015
$000
New Zealand72,49175,886
Australia3,8994,213
Total non-current assets76,39080,099
6. Loss on disposal of businesses and property, plant and equipment
2016
$000
2015
$000
Gain on disposal of property, plant and equipment229
Loss on disposal of business - Clear Grain Exchange(469)-
(467)29
During the period the Group disposed of the business and assets of:
•Rural magazine publications Dairy Exporter and Country-wide, effective 1 November 2016; and
•The Clear Grain Exchange, effective 1 December 2016.

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7. Impairment expense
At 30 June 2016, NZX recognised an impairment of part of the residual value of brand assets in relation to
NZX's Agri business, reflecting future expectations for rural publications. These assets were subsequently sold
as part of the disposal of the Group's rural magaine titles, refer note 6.
8. Adjustment to provision for earnout
The provision for the Apteryx (now NZX Wealth Technologies) earnout was calculated at 31 December 2015
based on a probability weighted range of possible outcomes against the earnout targets required to be met,
at the latest by 31 March 2017, for any payment to be made. The Group has reassessed the probability of
meeting the targets at 31 December 2016 and with only a short time left to the final earnout deadline it has
become clear that the targets will not be met. Accordingly, the earnout provision has been adjusted to nil.
The earnout receivable from the sale of Link Market Services was received during the period and accordingly
no accrual remains in respect of this item at 31 December 2016.
A provision for the final earnout payment for the acquisition of SuperLife was initially recognised in 2015 at
90% of the amount payable. In 2016 the provision has been increased to 95% reflecting the fact that funds
under management are currently ahead of the earnout target (refer note 19).
9. Operating revenue
Revenue is recognised to the extent that it is probable that the economic benefit will flow to NZX and the
revenue can be measured reliably, regardless of when the payment is being made. Revenue is measured at
the fair value of the consideration received or receivable. The specific revenue recognition criteria for the
classes of revenue are as follows:
i.Markets:
(1) Securities information revenue is recognised over the period the service is provided.
(2) Issuer services consists of revenue from annual listing fees, initial listing fees, subsequent capital
raisings and regulatory services. Initial and subsequent listing fees are recognised when the listing
or subsequent capital raising event has taken place. Annual listing fees are billed on 30 June for the
following 12 month period and are recognised on a straight line basis over this 12 month period.
Fees for regulatory services are recognised when the service is provided.
(3) Trading fees, from the trading of debt and equities securities, are recognised at trade date.
(4) Participant services consist of annual participant fees and initial participant fees. Initial participant
fees are recognised when the participant's application has been approved. Annual participant fees
are billed on 30 June for the following 12 month period and are recognised on a straight line basis
over this 12 month period.
(5) Fees for debt and equity clearing and settlement, which are recognised at settlement date (currently
two days after initial trade date).

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(6) Fees for the trading of derivatives and commodities are recognised at trade date. Fees for derivative
market clearing and settlement are recognised at settlement date.
(7) Revenue from the provision of energy post-trade systems and technology services and advisory and
related services is recognised over the period the service is provided.
ii.Funds Services - revenue for the provision of funds services is recognised when the services are rendered.
iii. Agri - agricultural information revenue consists of subscriptions and advertising fees. Subscription
revenues are recognised on a straight line basis over the subscription period. Advertising revenues are
recognised when the advertisement is published.
10. Operating expenses
Professional fees comprise:
2016
$000
2015
$000
Legal expenses(3,560)(3,604)
Other professional fees(2,033)(1,995)
Total professional fees(5,593)(5,599)
Legal expenses for the current year includes $3.0 million (2015: $3.1 million) incurred in relation to the Ralec
litigation, refer to note 27. Other significant legal costs in 2016 related to the FMCA compliance project.
Other significant legal costs in 2015 related to the cost of establishing new Smartshares ETFs and the
acqusition of Apteryx (now NZX Wealth Technologies).
Other expenses comprise:
2016
$000
2015
$000
Operating lease rental expense(1,832)(1,421)
Directors' fees(370)(406)
Remuneration paid to Group auditors(321)(306)
Remuneration paid to other auditors(3)(3)
Other operating expenses(3,028)(2,715)
Total other expenses(5,554)(4,851)
The directors' fees have declined this year as the number of board members reduced from seven to six
following the Annual Meeting in May 2015.

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Remuneration paid to Group auditors
2016
$000
2015
$000
Audit and review of NZX Group and subsidiary statutory financial statements(128)(134)
Audit of statutory financial statements for Funds managed by Smartshares Limited, an NZX subsidiary(153)(104)
Total audit fees(281)(238)
Prospectus extraction reports and operation reviews for Funds managed by Smartshares Limited-(29)
Annual operational audit of the Clearing House(35)(34)
Annual depository assurance engagement of New Zealand Depository Limited(5)(5)
Total other audit related services(40)(68)
Total fees paid to the auditor(321)(306)
11. Funds held on behalf of third parties
2016
$000
2015
$000
Bond deposits1,5061,346
Collateral deposits57,79455,287
Funds held on behalf of clients11,5475,153
70,84761,786
The collateral deposits represent balances deposited by participants to cover margins on outstanding
settlement obligations for cash market, stock lending transactions and derivative contracts. Funds lodged as
margin collateral are interest bearing and are carried at the amounts deposited which represent fair value.
Interest earned on collateral deposits is returned to participants and a collateral management fee is charged.
There is an equal and opposite amount disclosed under current liabilities for the total amount repayable to
participants.
The funds held on behalf of clients represent balances deposited by participants in addition to their cash
collateral requirements. The funds are lodged in a non interest bearing account and are carried at the amount
deposited which represents fair value. There is an equal and opposite amount disclosed under current
liabilities for the total amount repayable to participants.
The bond deposits represent balances deposited by issuers, required as a condition of listing on NZX's
markets. Funds lodged as bond deposits are interest bearing and are carried at the amounts deposited which
represent fair value. There is an equal and opposite amount disclosed under current liabilities for the total
amount repayable to issuers.
12. Gain on sale of associate
Effective 1 July 2015 the Group sold its 50% stake in Link Market Services Limited (Link) to the other 50%
shareholder for $14.3 million. The net sale proceeds comprised:
•$13.8 million of initial consideration received on settlement on 30 June 2015;

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•$623,000 of contingent consideration payable based on the future performance of Link, which was
received during 2016; less
•A liability to issue NZX shares to the value of $125,000 as a retention amount in respect of key employees
of Link Market Services in three years time if these employees remain with Link.
A gain on sale of $11.8 million was recognised in 2015, calculated as follows:
2016
$000
2015
$000
Disposal of associate
Proceeds from sale of associate-14,298
Less carrying value-(2,491)
Gain on sale of associate-11,807
13. Taxation
a.Income tax expense recognised in profit or loss
2016
$000
2015
$000
Tax expense comprises:
Current tax expense6,1197,507
Prior period adjustment-47
Deferred tax relating to the origination and reversal of temporary differences(1,622)(1,478)
Total tax expense4,4976,076
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax
expense in the financial statements as follows:
2016
$000
2015
$000
Profit before income tax expense13,67929,948
Income tax calculated at 28%(3,830)(8,385)
Non-deductible expenses(667)(1,398)
Non-taxable gain on sale of associate-3,306
Equity accounted earnings of associate-115
(4,497)(6,362)
Under provision of income tax in prior year-(45)
Tax credits-331
(4,497)(6,076)

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b. Current tax liabilities
2016
$000
2015
$000
Balance at beginning of the year(2,113)(195)
Current year charge(6,165)(7,507)
Prior period adjustment(137)(944)
Tax paid7,8246,533
Balance at end of year(591)(2,113)
c.Deferred tax liability
2016
$000
2015
$000
Balance at beginning of the year(5,938)(2,663)
Current year movement1,6221,478
Deferred tax on acquisition-(4,724)
Prior period adjustments(7)(29)
Balance at end of the year(4,323)(5,938)
Deferred tax balance comprises:
Employee entitlements867761
Doubtful debts14785
Property, plant and equipment, and software(5,643)(6,920)
Other306136
(4,323)(5,938)
d. Imputation credit account
2016
$000
2015
$000
Imputation credits available for use in subsequent reporting periods12,69414,830
14. Earnings per share
Basic earnings per share at 31 December 2016 is calculated by dividing the profit for the year by the weighted
average number of ordinary shares outstanding during the period. An adjustment to take into account the
shares issued under the Team and Results share plans (refer note 23) is made to weighted average number
of shares used in the calculation of the diluted earnings per share at 31 December 2016.

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a.Basic earnings per share
2016
$000
2015
$000
Profit for the year ($000)9,18223,872
Weighted average number of ordinary shares for the purpose of earnings per share (in thousands)267,914263,539
Basic earnings per share (cents per share)3.49.1
b. Diluted earnings per share
2016
$000
2015
$000
Profit for the year ($000)9,18223,872
Weighted average number of ordinary shares for the purpose of earnings per share (in thousands)269,696263,941
Fully diluted earnings per share (cents per share)3.49.0
15. Bank overdraft and cash flow reconciliation
a.Bank overdraft facility
The Group has access to an overdraft facility which was established in 2015 to allow the Group flexibility in its
working capital management. The facility limit is $10.0 million and has no fixed expiry date. The bank may
cancel the facility by giving 30 days written notice. The effective interest rate of the facility at 31 December
2016 was 3.85% (2015: 4.15%).

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b. Reconciliation of profit for the year to net cash provided by operating activities
2016
$000
2015
$000
Profit for the year9,18223,872
Share of profit of associate-(411)
Gain on sale of associate-(11,807)
Share based payment bonus accrual470653
Non cash interest expense on investing activity357343
Depreciation and amortisation expense7,9366,990
Impairment in intangible and goodwill793-
Disposal of assets365-
Adjustment to provision for earnout(731)-
9,190(4,232)
(Increase) in receivables and prepayments(3,118)(1,324)
Increase in trade payables and other liabilities1,457436
Increase in current tax liability(1,522)992
(Decrease) in deferred tax liability(1,615)(1,449)
(4,798)(1,345)
Net cash provided by operating activities13,57418,295
16. Receivables and prepayments
Receivables and prepayments are initially recognised at the fair value of the amounts to be received. They are
subsequently measured at amortised cost (using the effective interest method) less impairment losses, if any.
2016
$000
2015
$000
Trade receivables9,8077,022
Provision for doubtful debts(560)(302)
9,2476,720
Sundry debtors1,7912,013
Prepayments2,2042,094
Accrued proceeds for disposal of Link Market Services-623
Accrued interest7690
Accrued income74629
Financial asset - current amount1,859-
Total current receivables and prepayments15,92311,569
Financial asset - non current amount-1,827
Total receivables and prepayments15,92313,396

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The current financial asset at 31 December 2016 (2015: non current financial asset) represents the loan owed
by the former CEO under the CEO share plan, as described in note 23.
a.Movement in provision for doubtful debts
The Company maintains a provision for doubtful debts when there is objective evidence of its customers
being unable to make required payments and also makes a provision for doubtful debts on all balances
greater than 90 days overdue which have not been subject to review.
2016
$000
2015
$000
Balance at beginning of the year(302)(278)
Amounts written off during the year-54
(Increase)/decrease in provision recognised in profit or loss(258)(78)
Balance at end of the year(560)(302)
17. Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation and impairment. The cost of
assets is the value of the consideration given to acquire the assets and the value of other directly attributable
costs incurred in bringing the assets to the location and condition necessary for their intended use.
Depreciation is recognised in the Income Statement and is calculated on a straight line basis so as to write off
the net cost of each asset over its expected useful life to its estimated residual value. Leasehold
improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter,
using the straight line method. The estimated useful lives, residual values and depreciation method are
reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of depreciation:
•Computer equipment: 3 - 7 years
•Furniture and equipment: 3 - 10 years
•Leasehold improvements: 5 - 10 years
•Motor vehicles: 3 years
Computer
equipment
$000
Furniture and
equipment
$000
Leasehold
improvements
$000
Motor
Vehicles
$000
Capital work
in progress
$000
Total
$000
Net book value at 1 January 20167917451,90545213,507
Additions during the year8021673825731,105
Transfers from WIP during the year14-70-(84)-
Depreciation expense for the year(694)(320)(239)(41)-(1,294)
Disposals during the year(37)(9)-(6)(7)(59)
Net book value at 31 December
20168765831,7742333,259

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18. Trade payables
Trade payables and accruals are initially recognised at fair value less transaction costs (if any). They are
subsequently measured at amortised cost using the effective interest method.
2016
$000
2015
$000
Trade payables607248
Goods and services tax payable1,090727
Accrued expenses3,8344,807
Accrued interest101100
5,6325,882
19. Other liabilities
2016
$000
2015
$000
Employee benefits5,5304,430
Unearned income8,2737,860
Deferred consideration payable on Apteryx acquisition-1,223
Earn out accrual-75
Total current other liabilities13,80313,588
Non current - Deferred consideration on SuperLife acquisition9,0938,272
Total other liabilities22,89621,860
Deferred consideration on SuperLife acquisition
NZX acquired 100% ownership of SuperLife Limited, a provider of superannuation, KiwiSaver, and managed
investments products, effective 1 January 2015.
In addition to the initial consideration of $20 million, the sale and purchase agreement provided for
additional consideration of up to $15.0 million dependent on the retention and growth of SuperLife's Funds
Under Management (FUM) over a three year period ending 31 December 2017. These further payments, if
targets are achieved, were $5.0 million of NZX ordinary shares at an issue price of $1.21 per share (issued
January 2016) and up to $10.0 million in cash.
Up to $10.0 million in cash will become payable after 31 December 2017, with the amount payable
dependant on the rate of growth in FUM over the three year earnout period. No additional amount is payable
if FUM is less than $1.41 billion at 31 December 2017 (equivalent to a 7% compound annual growth rate). The
full $10.0 million is payable if FUM exceeds $1.57 billion (equivalent to an 11% compound annual growth
rate). Partial payment of the earnout amount will result if FUM at 31 December 2017 is between $1.41 billion
and $1.57 billion.
Based on the expected probabilities of achieving the earnout, taking into account historic growth rates, the
Group has accrued for 95% (2015: 90%) of the $10.0 million of contingent consideration (present valued) that
will be paid at the end of the three year period if the 11% growth target is met.

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20. Term loan
2016
$000
2015
$000
Current--
Non-current20,00020,000
Total term loans20,00020,000
The $20.0 million term loan has an expiry date of 16 January 2019. The facility is unsecured and contains two
financial covenants which have been met throughout the year:
•The ratio of interest bearing debt to EBITDA shall not exceed 3.5 times; and
•The ratio of EBITDA to interest shall exceed 4.0 times.
The weighted effective interest rate at 31 December 2016 was 2.60% (31 December: 3.62%).
21. Shares on issue
The Company had 268,315,689 fully paid ordinary shares as at 31 December 2016 (2015: 263,919,546 fully
paid ordinary shares). The holders of ordinary shares are entitled to receive dividends as declared and are
entitled to one vote per share at meetings. Included within this total is 1,575,000 fully paid ordinary shares
(2015: 1,575,000 fully paid ordinary shares) issued under the CEO share plan as outlined in note 23.
At 31 December 2016 the Company has 2,018,493 restricted shares (2015: 315,889 restricted shares) on issue
under the NZX Limited employee share plan - Team and Results held by entities within the Group. All shares
issued under the employee share plan are subject to transfer conditions and eligibility criteria before they are
able to vest as ordinary shares. Until those transfer conditions and/or eligibility criteria are met, none are
quoted on the NZX Main Board.
Movement in share capital
Number
$000
Balance at 1 January 2015255,613,66929,975
Issue of fully paid ordinary shares8,305,87710,000
Share based contingent consideration accrued-5,000
Share based payments-2,341
Non-vesting shares-(88)
Balance at 31 December 2015263,919,54647,228
Issue of fully paid ordinary shares4,396,14369
Share based payments-345
Non-vesting shares-(86)
Balance at 31 December 2016268,315,68947,556

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22. Dividends
20162015
For year
ended
Cents per
share
Total $000Cents per
share
Total $000
Dividends declared and paid
March 201531 Dec 143.007,916
September 201531 Dec 153.007,918
March 201631 Dec 153.008,043
September 201631 Dec 163.008,051
Total dividends paid for the year6.0016,0946.0015,834
Refer to note 29 for details of the second half 2016 dividend.
23. Share based payments
a.CEO share plan
A CEO share scheme was in place under the former CEO's employment contract. The scheme runs for a
period of five years expiring mid 2017 and will continue in place until its conclusion as part of the agreed
transition for the former CEO who resigned as an employee effective 31 December 2016.
Pursuant to the terms of the scheme, 1,575,000 new ordinary shares were issued on 31 December 2012 at an
issue price of $1.19 per share, being the volume weighted average price of NZX shares for the 10 business
days ended on Friday 4 May 2012 (the business day immediately preceding the CEO's start date).
The issue price of the shares is funded by a loan from NZX, which bears interest at NZX's cost of bank
funding. The shares are entitled to dividends and are held by a nominee wholly owned by NZX for the
duration of the scheme.
If over the period of the scheme NZX's total shareholder return (TSR) exceeds a margin of 1% over NZX's
weighted average cost of capital (to be determined annually by the Board), the former CEO will receive a
taxable bonus equivalent to the amount of the loan and will receive a transfer of the shares on full repayment
of the loan and any accrued interest. For the purposes of determining the hurdle rate, the initial 2012 issue
price has been set at $1.10 which was the price on the day of the release of the 1H results (20/8/2012) under
the previous CEO. If the hurdle rate is not met, then on expiry of the scheme the former CEO will not receive
the bonus, will be required to repay the loan from his own resources and will receive a transfer of shares.
The Group historically accounted for the scheme in accordance with NZ IFRS 2 by calculating the fair value
of the shares and recognising this as an expense on a straight line basis over the five year term of the plan.
The total fair value was determined to be $383,000. The fair value was calculated by reference to an
independent valuation which was based on the following assumptions:
•Grant date: 2 August 2012
•Share price on grant date: $1.19

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•Historic volatility (NZX share price): 29%
As a result of the former CEO ceasing employment on 31 December 2016, the remaining unrecognised
balance of $38,300 has been recognised in the current period.
b. Employee and other restricted shares
NZX Limited employee share plan - Team and Results

The NZX Limited employee share plan – team and results (Team and Results Plan) was implemented in May 2010.
Under the terms of the Team and Results Plan, NZX offers selected employees (Participants) non-participating
redeemable shares (Restricted Shares) which will be reclassified as NZX ordinary shares at the completion of
the term of the Team and Results Plan, subject to certain eligibility and transfer conditions.
Both the Team and Results components of the Team and Results Plan are offered on terms of three years.
If the eligibility or transfer conditions are not met, the Restricted Shares are redeemed by NZX. The proceeds
from the redemption of the Restricted Shares will be applied in repayment of the Loan, which will discharge
any obligation on the Participant to repay the Loan. Following redemption, the Participant will not receive any
entitlements, such as distributions or dividends, issued in respect of the Restricted Shares. The effect of this
is that the Participant receives no shares or cash and the Loan is repaid.
Details of Restricted Shares issued under the Team and Results Plan, transfers of shares to NZX employees and
redemptions of shares during the period are set out below:
Number of
shares
000
Average
share price
$
Balance at 1 January 20154961.23589
Shares transferred to NZX employees(41)1.34146
Redemptions(139)1.25899
Balance at 31 December 20153161.21203
Shares issued2,3111.09303
Shares transferred to NZX employees(196)1.21429
Redemptions(412)1.06796
Balance at 31 December 20162,0191.10500
Total financial assistance provided by NZX under the Team & Results Plan as at 31 December 2016 was
$2,231,000 (2015: $383,000).
24. Financial instruments
The Group’s activities expose it to a variety of financial risks including credit risk, liquidity risk and market risk
(including foreign currency risk and interest rate risk).

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The Board of directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework, including the management of financial risk. The Board has established an Audit and
Risk Committee (Committee), which is responsible for developing and monitoring the Group’s financial risk
management policies (except for those relating to clearing and settlement activities discussed below). The
Committee reports regularly to the Board of directors on its activities.
The NZX Group undertakes securities clearing and settlement activities for the listed equities, debt and
derivatives markets through its clearing house New Zealand Clearing and Depository Corporation Limited
(NZCDC or the Clearing House). These activities expose NZCDC and the NZX Group to several significant
financial risks. Management of these risks is the responsibility of the Board of directors of NZCDC. The NZCDC
Board reports to the main NZX Board on a regular basis on its risk management activities.
The specific financial risks faced by the Group, the way in which they are managed and their impact on the
financial statements are discussed below:
a.Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. Credit risk arises from three principal sources:
•Receivables from customers arising in the normal course of business;
•Investment of surplus cash and Clearing House risk capital with financial institutions;
•Credit risk arising from the activities of the Clearing House, which is discussed separately in section (g).
Excluding Clearing House activities, NZX has no significant concentrations of credit risk from general
customers, with balances receivable spread across a broad portfolio of customers. NZX does not require
collateral to be provided against receivables incurred in the ordinary course of business, although listed
issuers and participants in NZX's equity and debt markets are required to provide a bond that may be called
upon in the event of default on financial obligations.
The status of trade receivables at the reporting date was as follows.
2016
$000
2015
$000
Not past due4,8185,148
Past due 0 - 30 days1,514540
Past due > 30 days3,4751,334
9,8077,022

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In summary, trade receivables are determined to be impaired as follows.
2016
$000
2015
$000
Gross trade receivables9,8077,022
Individual impairment(153)(155)
Collective impairment(407)(147)
9,2476,720
The movement in the allowance for impairment in respect of trade and other receivables during the year is set
out in note 16(a).
For investment of risk capital and surplus cash balances, NZX follows a treasury policy that requires
investments to be held only with high credit quality counterparties and sets limits on NZX's exposure to
individual counterparties. The counterparty limits are as follows:
•The greater of $10 million or 60% of cash and cash equivalents for registered banks that operate in New
Zealand with a minimum credit rating of AA-; and
•30% of total cash and cash equivalents for other institutions with a minimum credit rating of A- (the total
exposure for other institutions cannot exceed 50% of the total cash and cash equivalents).
b. Foreign exchange risk
NZX primarily derives revenues and incurs expenses in local currencies (NZD for New Zealand operations and
AUD for Australian operations). In a minority of cases however, receipts and payments are in foreign
currencies (principally USD). NZX utilises foreign currency receipts to offset purchases denominated in foreign
currencies. The Company determines forward exposures, and considers these in line with internal policies and
procedures. It may enter into forward exchange agreements to keep any exposure to an acceptable level,
though no such contracts were considered necessary in the current or prior financial year. Monetary assets and
liabilities are kept to an acceptable level by buying or selling foreign currencies at the spot rate.
Foreign exchange risk also arises on the translation of NZX's investment in its Australian operations and
intercompany balances between the parent and these entities. NZX does not attempt to hedge this risk.
c.Interest rate risk
NZX is exposed to interest rate risk in that future interest rate movements will affect the interest that it pays
on borrowings and the cash flows and the market value of investment assets. NZX does not currently use any
derivative products to manage interest rate risk.
The Group's investment assets, particularly those designated as risk capital, are generally required to be
readily convertible into cash. These are therefore invested in short term interest bearing assets or held as bank
deposits at floating rates of interest. This reduces the risk of movements in the market value of financial
investments, but increases the Group's exposure to changes in cash flows as a result of shot term movements
in interest rates.

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During 2015, the group drew down $20 million of term debt. $10 million of this was to fund the acquisition
of SuperLife Limited, while $10 million was to provide for additional risk capital in the Clearing House. The
interest period for the debt utilised to provide risk capital is set to match as closely as possible the interest
period for the related short term investments in which the risk capital is held, thus minimising the net interest
rate risk to the Group.
As at balance date, none of the Group's investments or term debt were subject to interest periods of greater
than three months.
An analysis of the sensitivity of the Group's earnings to movements in interest rates is shown below. As at
both 31 December 2016 and 2015 the Group's interest bearing assets exceeded its interest bearing
liabilities, hence an increase in interest rates would have had a positive impact on earnings.
2016
$000
2015
$000
Effect on net interest income:
1% increase in interest rate274398
1% decrease in interest rate(274)(398)
This above information is calculated using the Group's cash balances (less the $20.0 million held as risk
capital for Clearing House), the Group's term debt, and the bank balances of $15.7 million (2015:
$18.2 million) held by the Funds managed by the Group's subsidiary, Smartshares Limited. The Funds' bank
balances are included in Smartshares Limited as the manager of these Funds is entitled to interest on
amounts held in respect of distributions received (including distributions in respect of securities on loan under
any securities lending programme undertaken by the Fund) and interest earned on application monies.
d. Liquidity risk management
Liquidity risk is the risk that the Group will be unable to realise its assets on a sufficiently timely basis to meet
its financial liabilities as they fall due. Liquidity risk arises from the general activities of the Group as well as in
specific situations in the operation of the Clearing House. Clearing House liquidity risk is discussed in section
(g).
The Group manages its general liquidity risk by maintaining adequate cash reserves, maintaining a sufficient
term to maturity for its term borrowings and maintaining adequate overdraft facilities to provide it the
flexibility to absorb predicted variability in cash flows. It continuously monitors forecast and actual cash flows
to assist with determining the appropriate levels of cash reserves and borrowing capacity.
The table below summarises the Group's exposure to liquidity risk based on the undiscounted contractual
cash flows and maturities of term debt.
Term loan
Total
contractual
cash flows
$000
Less than 1
year
$000
1-2 years
$000
2-5 years
$000
More than 5
years
$000
31 December 2016(21,040)(520)(20,520)--
31 December 2015(21,448)(724)(20,724)--

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e.Accounting classification and fair values
The fair value of the financial instruments, which comprise cash and cash equivalents, funds held on behalf of
third parties, receivables, trade payables, other liabilities and term loans, approximates their carrying
amounts in these accounts.
f.Energy Clearing House
NZX, through its subsidiary Energy Clearing House Limited (ECH), is the electricity-market operation service
provider responsible for ensuring that market participants pay or are paid the correct amount for the
electricity they generated or consumed during the previous month. ECH also manages the prudential security
requirements of participants, intended to ensure payers can meet their obligations in the market.
At 31 December 2016, ECH has outstanding payables and receivables for the purchase and sale of electricity,
and the settlement of transmission losses. These items are not recorded in the Group’s statement of financial
position, because the energy market participants have accepted the risks associated with electricity settlement.
In discharging its obligations under the Electricity Industry Participation Code, ECH is required to ensure that
purchasers maintain adequate levels of prudential security. Participants can comply with this obligation in a
number of ways, including third party guarantees, letters of credit and deposits of cash with the ECH.
ECH holds cash deposit security on trust, and does not recognise the security provided in its statement of
financial position. There was $11,789,209 cash held from such deposits at 31 December 2016 (2015: $9,743,875).
g. Clearing House counterparty credit risk
The Clearing House acts as a central counterparty to trades on NZX's securities and derivatives markets.
Trades that enter the Clearing House are immediately novated such that the Clearing House becomes the
buyer to every sell trade and the seller to every buy trade. As buy and sell settlement transactions that are
novated to the Clearing House offset each other, the Group is not directly exposed to price movements in the
underlying equities or derivatives.
For the period between trade date and settlement date, the Clearing House is exposed to credit risk on the
buy trade as participants could default on their obligations to deliver cash in exchange for the securities
acquired by the Clearing House on the buy side of the trade.
Should the buying participant fail to deliver cash, the Clearing House must still meet its obligation to buy the
securities from the selling participant. In this instance the Clearing House is subject to liquidity risk as it may
be unable to realise sufficient cash to pay for the securities it is acquiring.
If the buying participant defaults on its obligation to deliver cash and the Clearing House acquires the
securities, it then becomes exposed to market price risk on the securities acquired. If the price of the
securities falls, the Clearing House would incur a loss on the disposal of those securities.
Credit risk
Counterparty credit risk is primarily managed in two ways. Firstly, through imposing requirements on
participants, including minimum capital adequacy requirements, that aim to ensure that participants maintain
sufficient capital and liquidity to meet their obligations to the Clearing House on an ongoing basis. Secondly,

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through calculating margin requirements on participants' open positions and requiring participants to post
this margin as collateral as security for the trades. Margin requirements are calculated for each participant
based on that participant’s unsettled transaction in each security. Margin rates for each security are based on
the underlying characteristics of the security and its price volatility. Margin requirements are calculated on a
daily basis using current market prices. Each day, margin requirements are compared to collateral held and a
margin call made where necessary. Participants are then required to post additional eligible collateral.
Eligible collateral includes cash, bank performance bonds, and securities (including New Zealand and US
government securities and NZX 50 listed securities). Securities provided as collateral are subject to a
prudential value discount, commonly referred to as a "haircut".
The Group is also exposed to counterparty credit risk through New Zealand Clearing Limited (NZCL) by acting
as central counterparty for securities lending transactions. As NZCL is exposed to the full principal value of
each loan, NZCL requires collateral to be posted equal to 105% of the loan. All loans are revalued on a daily
basis and additional collateral required where appropriate.
Liquidity risk
Liquidity risk is managed through a combination of the collateral held from participants, the Clearing House's
own cash reserves and a specific liquidity facility which provides short term liquidity in the event of a
participant default.
Collateral from the defaulting participant would be applied towards meeting the settlement obligations on the
other side of the trade. The Clearing House also holds risk capital in cash and highly liquid investments, which
is available to meet the buy side obligations of defaulted transactions. As at 31 December 2016 the Clearing
House held risk capital of $20 million (31 December 2015: $20 million). Finally, on 30 December 2014 the
Clearing House entered into an agreement with a major New Zealand fund manager to provide liquidity
support in the form of $50 million of securities or cash. Use of this facility is limited to situations where a
participant default has occurred. The Clearing House may access the facility to obtain liquidity in the form of
securities or cash, collateralised against cash or eligible securities provided by the Clearing House to the Fund
Manager. The facility was for an initial term of two years ending December 2016. This has been extended for
another two years ending December 2018.
Market risk
The risk that the Clearing House will realise a loss from liquidating securities that it becomes the owner of as
a result of a participant default is managed by maintaining sufficient participant collateral and risk capital to
absorb projected losses. Any losses incurred are initially funded from the defaulting participant's margin
collateral. Should this be insufficient to cover the losses, then these must be met from the Clearing House's
own risk capital. The Clearing House regularly stress tests clearing participant exposures against the total
amount of margin collateral and risk capital resources.
Clearing balances outstanding
As at 31 December 2016, NZCL has a right to receive $5.610 million (2015: $13.872 million) from Clearing
Participants and an obligation to pay $5.610 million (2015: $13.872 million) to Clearing Participants for the
settlement of cash market transactions. All of these outstanding transactions were settled subsequent to
31 December 2016. The aggregate absolute value of all net outstanding cash market settlement transactions
at 31 December 2016 was $58.613 million (2015: $111.193 million). In addition, at 31 December 2016, the
total value of outstanding securities loans was $1.605 million (2015: $5.205 million) and the absolute notional

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value of open derivative contracts was US$128.71 million (2015: US$57.560 million) and NZD$103.06 million
(2015:NZD$nil).
Cash collateral held to cover these outstanding settlement positions at 31 December 2016 was
$35.707 million (2015: $35.542 million). In addition, at 31 December 2016 no collateral (2015: $5.5 million)
was held by way of performance bonds.
25. Related party transactions
a.Transactions with key management personnel
Key management personnel comprises the Group’s senior management team. Key management personnel
compensation comprised the following:
2016
$000
2015
$000
Short-term employee benefits4,1773,758
Share-based payments141218
Resignation benefits1,305-
5,6233,976
b. Transactions with directors and other entities NZX directors are associated with
The Company regularly enters into transactions under normal commercial terms and conditions with other
entities that some of the directors may sit on the Board of or are employed by.
Directors fees for the year were $370,000 (2015: $406,000) and have been included in other expenses (note 10 ).
c.Transactions with other related parties
During 2015, the Group made sales to and purchases from its associate, Link Market Services Limited (Link),
the amounts of which are set out below. The Group had no associates in 2016 following the disposal of Link
in June 2015.
2016
$000
2015
$000
Transactions with related parties
Sales to Link Market Services Limited-275
Interest on receivable from former CEO106104
Purchases from Link Market Services Limited-(184)
Balances with related parties
Receivable from Link Market Services Limited--
Current receivable from former CEO1,87734
Non current receivable from former CEO-1,827
Payable to Link Market Services Limited--

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d. Transactions with managed funds
Management fees are received from the funds managed by wholly owned subsidary Smartshares Limited and
are shown in the Income Statement as funds management revenue. Management fees were also received from
the funds managed by wholly owned subsidary SuperLife Limited which was amalgamated into Smartshares
Limited on 9 November 2016.
26. Lease commitments as lessee
Non-cancellable operating lease payments
2016
$000
2015
$000
Non-cancellable operating lease payments:
Up to 1 year1,9272,020
1 - 2 years1,8271,851
2 - 5 years3,8524,996
> 5 years-491
7,6069,358
The Group leases a number of office premises under operating leases. The leases have a remaining period
of between one to five years, with options to renew beyond the initial expiry date.
27. Contingent liabilities
Ralec Litigation
The Ralec litigation, disclosed as a contingent liability in the period year, was heard in the High Court in New
Zealand between May 2016 and July 2016. The final judgement was released on 16 November 2016. No
damages or compensation were awarded to either party.
Final settlement was reached between the parties to the dispute on 1 December 2016. As a result, there will
be no appeal by either party of the High Court's decision.
There are therefore no contingent liabilities as at 31 December 2016.
28. Capital commitments
2016
$000
2015
$000
Capital expenditure commitments:
Software development7101,368
7101,368

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29. Subsequent events
Dividend
Subsequent to balance date the Board declared a second half 2016 dividend of 3.00 cents per share, to be
paid on 24 March 2017 (with a record date of 10 March 2017). This is in line with the NZX dividend policy
adopted on 21 February 2014.

© 2017 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Independent Auditor’s Report
To the shareholders of NZX Limited
Report on the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated
financial statements of NZX Limited (the company)
and its subsidiaries (the Group) on pages 36 to 67:
i. Present fairly in all material respects the Group’s
financial position as at 31 December 2016 and
its financial performance and cash flows for the
year ended on that date; and
ii. Comply with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards.


We have audited the accompanying
consolidated financial statements which
comprise:
— the consolidated statement of financial position
as at 31 December 2016;
— the consolidated income statement, statement
of comprehensive income, statement of
changes in equity and statement of cash flows
for the year then ended; and
— Notes, including a summary of significant
accounting policies and other explanatory
information.

Basis for opinion
We conducted our Audit in accordance with International Standards on Auditing (New Zealand) (ISA’s (NZ)). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1 (Revised) Code of
Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Our responsibilities under International Standards on Auditing (New Zealand) are further described in the
Auditor’s Responsibilities for the Audit of the consolidated financial statements section of our report.
Our firm has also provided other regulatory assurance services to the Group. Subject to certain restrictions,
partners and employees of our firm may also deal with the group on normal terms within the ordinary course of
trading activities of the business of the group. These matters have not impaired our independence as auditor of
the group. The firm has no other relationship with, or interest in, the group.
Materiality
The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and on the consolidated financial statements as a whole. The materiality for the consolidated financial
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statements as a whole was set at $0.8 million determined with reference to a benchmark of group profit before
tax. We chose the benchmark because, in our view, this is a key measure of the group’s performance.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements in the current period. We summarise below those matters and our key
audit procedures to address those matters in order that the shareholders as a body may better understand the
process by which we arrived at our audit opinion. Our procedures were undertaken in the context of and solely
for the purpose of our statutory audit opinion on the consolidated financial statements as a whole and we do not
express discrete opinions on separate elements of the consolidated financial statements.
The key audit matter How the matter was addressed in our audit
Goodwill and other intangible assets impairment assessment ($73 million, note 4 of the financial
statements)
NZX’s goodwill and other intangible
assets arise from acquisitions and
subsequent IT investments and
relate to a number of different cash
generating units (CGU’s) as
described in note 4 of the financial
statements.
The goodwill and other intangible
assets are quantitatively significant
and the valuation models used in the
impairment tests include a range of
subjective assumptions about the
future performance of the cash
generating units.
We focussed on the impairment
tests for the CGUs that we
considered to have a higher risk of
impairment. This assessment was
primarily based on the level of
judgement involved in the underlying
valuation model and market
conditions for the relevant CGU. The
CGUs we considered to be higher
risk were Energy, Agri, Funds
management, Wealth Technologies
and the Grain Information Unit.
For the CGUs we determined to have a higher risk of impairment, we
compared the cash flow forecasts to Board approved budgets and
assessed forecasting accuracy by comparing current year actual
performance to prior year budgets. The budgets covered one year but
the forecasts used in the valuation models generally extend to five
years. The period beyond the budgets were therefore of particular
focus for our additional procedures described below.
We reviewed and tested the significant assumptions applied to the
revenue forecasts including comparing the forecasts to contractually
receivable amounts, industry/market statistics or forecast inflation
rates.
We assessed the cost forecasts against forecast inflation rates and
managements business plans for the CGUs.
We also compared the discount rate used to our own independently
determined rate and compared terminal growth rates to long term
forecast inflation rates.
As a cross check we compared the valuations to the market, using
comparable businesses (where available) and their earnings or funds
under management multiples.
As an overall test we also compared the Group’s net assets as at 31
December 2016 of $70 million to its market capitalisation of $282
million at 31 December 2016, and noted implied headroom of $212
million.
Based on our analysis, the assumptions and judgements used by the
Directors in the Group’s impairment assessment were within
acceptable ranges and in line with the current market views. We did not
identify any material issues with the carrying value of the goodwill or
intangible assets.

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Other Information
The Directors, on behalf of the group, are responsible for the other information included in the entity’s Annual
Report. Other information may include the Chairman’s report, CEO’s Report, disclosures relating to corporate
governance and statutory information. Our opinion on the consolidated financial statements does not cover any
other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Use of this Audit Report
This report is made solely to the shareholders as a body. Our audit work has been undertaken so that we might
state to the shareholders those matters we are required to state to them in the Auditor’s Report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
the shareholders as a body for our audit work, this report, or any of the opinions we have formed.
Responsibilities of Directors for the consolidated financial statements
The Directors, on behalf of the group, are responsible for:
— the preparation and fair presentation of the consolidated financial statements in accordance with generally
accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial
Reporting Standards) and International Financial Reporting Standards,;
— implementing necessary internal control to enable the preparation of consolidated financial statements that
are fairly presented and free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the consolidated financial
statements
Our objective is:
— to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error; and
— to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with International Standards on Auditing (New Zealand) will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
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A further description of our responsibilities for the Audit of these consolidated financial statements is located at
the External Reporting Board (XRB) website at:
https://www.xrb.govt.nz/Site/Auditing_Assurance_Standards/Current_Standards/Page1.aspx.
This description forms part of our Auditor’s Report.




Brent Manning - Partner
KPMG
Wellington
13 February 2017


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Statutory
Information
1. Business operations
The Company sold its Australian grain market
operator Clear Grain Exchange, effective 1 December
2016. It also sold its two remaining rural magazines
on 1 November 2016. There have been no other
changes in the core business undertakings of the
Company or its subsidiaries during the year.
2. Interests register
NZX is required to maintain an interests register in
which particulars of certain transactions and matters
involving the directors must be recorded.
3. Directors interests
The directors have declared interests in the following
entities. Where (R) is shown next to an entity, this
denotes that the director has ceased to have that
interest during 2016.
Director
InterestEntity
Alison GerryDirectorKiwibank Limited
DirectorTelevision New Zealand
Limited (R)
DirectorNew Zealand Clearing and
Depository Corporation
Limited
TrusteeMichael Hill International
Violin Competition
DirectorInfratil Limited
DirectorInterestEntity
DirectorAsteron Life Limited
DirectorVero Insurance New Zealand
Limited
DirectorVero Liability New Zealand
Limited
DirectorSpark New Zealand Limited
Dr Patrick
Strange
ChairmanChorus Limited
DirectorMercury NZ Limited
DirectorAuckland International
Airport Limited
DirectorAusgrid
DirectorEndeavour Energy
DirectorEssential Energy (Australia)
DirectorNew Zealand Clearing and
Depository Corporation
Limited
Dame
Therese
Walsh
Deputy
Chairman
Television New Zealand
Limited
ChairInternational Development
and Selection Panel, MFAT
MemberMajor Events Investment
Panel, MBIE
MemberStrategic Risk and Resilience
Advisory Board, DPMC
TrusteeWellington Regional Stadium
Trust
DirectorASB Bank Limited
Council
Member
Victoria University of
Wellington

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DirectorInterestEntity
ChairNew Zealand Rugby Diversity
Committee
DirectorAir New Zealand Limited
AmbassadorWellington Homeless
Woman’s Trust
James MillerDirectorAuckland International
Airport Limited
DirectorMercury NZ Limited
DirectorAccident Compensation
Corporation
DirectorNew Zealand Clearing and
Depository Corporation
Limited (R)
Jon
Macdonald
CEOTrade Me Group Limited
DirectorTrade Me Limited
DirectorTMG Trustee Limited
DirectorOld Friends Limited
DirectorTrade Me Comparisons
Limited
TrusteeNew Zealand Technology
Trading Charitable Trust
Neil Paviour-
Smith
DirectorForsyth Barr Limited and
Associated Companies
DirectorForsyth Barr Limited
DirectorLeveraged Equities Finance
Limited
Board MemberNew Zealand Institute of
Chartered Accountants
Regulatory Board
DirectorChartered Accountants
Australia and New Zealand
Pro ChancellorVictoria University of
Wellington
4. Information used by director
There were no notices from directors of the Company
requesting to disclose or use Company information
received in their capacity as directors that would not
otherwise have been available to them.
5. Directors’ remuneration
The total remuneration available for directors is fixed
by shareholders. The annual fee pool limit is $435,000
and has not been increased since it was approved by
shareholders at the annual meeting in April 2012.
The current fees paid to NZX directors are $50,000
per annum for directors and $100,000 for the Chair.
No additional fees are paid for Committee
Memberships. An additional $10,000 per annum is
paid to non-executive directors of NZX’s wholly owned
subsidiary New Zealand Clearing and Depository
Corporation Limited (NZCDC). Total remuneration
received by each Director in 2016 is set out in the
table below.
DirectorRole
Board
fees
NZCDC
fees
Total
remuneration
Alison
Gerry
Director$50,000$10,000$60,000
Jon
Macdonald
Director$50,000–$50,000
James
Miller
Chairman$100,000$3,984$103,984
Neil
Paviour-
Smith
Director$50,000–$50,000
Dr Patrick
Strange
Director$50,000$6,071$56,071
Dame
Therese
Walsh
Director$50,000–$50,000
Total$350,000$20,055$370,055
6.Indemnification and insurance of
directors and officers
NZX pays premiums in respect of directors’ liability
insurance. The policies do not specify a premium for
individuals.
The insurance provides cover against costs and
expenses involved in defending legal actions and any
damages or judgments awarded or entered against
the individual, settlements negotiated and any legal
costs or expenses awarded against the individual
arising from a liability to persons (other than the
company or a related body corporate) incurred in
their position as a director unless the conduct involves
a wilful breach of duty, improper use of inside
information or position to gain any profit or advantage
or any criminal, dishonest, fraudulent or malicious acts
or omissions or any knowing or wilful violation of any
statute or regulation.

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NZX has granted indemnities to NZX directors and
NZX appointed directors of operating subsidiaries in
relation to potential liabilities and costs they may incur
for acts or omissions in their role as a director of NZX
or an NZX subsidiary. Similar exclusions to those
described in the previous paragraph on insurance apply.
7. Subsidiary Company directors
The directors of all NZX subsidiaries during the year
are as follows.
Clearing House entities

New Zealand Clearing and Depository Corporation
Limited
Timothy Bennett (Ceased to hold office 30 December
2016)
Mark Peterson
James Miller (Non-executive director, ceased to hold
office 30 December 2016)
Alison Gerry (Independent director)
Dr Patrick Strange (Independent director)
New Zealand Clearing Limited
Timothy Bennett (Ceased to hold office 30 December
2016)
Mark Peterson
New Zealand Depository Limited
Timothy Bennett (Ceased to hold office 30 December
2016)
Mark Peterson
New Zealand Depository Nominee Limited
Amanda Simpson (Ceased to hold office 30 December
2016)
Benjamin Phillips
Other NZX Subsidiaries

Energy Clearing House Limited
Amanda Simpson (Ceased to hold office 30 December
2016)
Benjamin Phillips
Fundsource Limited
Bevan Miller
Smartshares Limited
Timothy Bennett (Ceased to hold office 30 December
2016)
Bevan Miller
Paul Baldwin
Guy Elliffe (Independent director)
John Williams (Independent director)
NZX Wealth Technologies Limited
Bevan Miller
Mark Peterson
NZX Profarmer Australia Pty Limited
Timothy Bennett (Ceased to hold office 30 December
2016)
Nathan Cattle (Ceased to hold office 30 December 2016)
Ron Storey
Bevan Miller
NZX Agri Advisors Pty Limited
Nathan Cattle (Ceased to hold office 30 December 2016)
Ron Storey
NZX Rural Limited
Timothy Bennett (Ceased to hold office 30 December
2016)
Bevan Miller
Mandela Investments Limited
Bevan Miller
MXF Nominees Limited
Bevan Miller
New Zealand Exchange Limited
Bevan Miller
NZX CPL Nominee Limited
Bevan Miller
NZX Executive Share Plan Nominees Limited
Mark Reese (Independent Director)
NZX Holding No. 3 Limited
Bevan Miller
NZX Holding No. 4 Limited
Timothy Bennett – (Ceased to hold office 30 December
2016)