NZX Full Year 2017 Results & Annual Report Published

NZX Limited
Level 1, NZX Centre
11 Cable Street
PO Box 2959
Wellington 6140
New Zealand
Tel +64 4 472 7599

www.nzx.com

www.nzx.com 1 of 3
19 February 2018

NZX delivers strong 2017 full year result

NZX today announced its financial results for the year ended 31 December 2017.
1


 Net profit after tax increased to $14.8 million, up 61.6%;
 Operating earnings up 31.3% to $29.0 million on a like-for-like basis;
2

 Revenue up 1.1% on a like-for-like basis to $75.3 million;
 Operating expenses decreased 11.6% on a like-for-like basis as cost control initiatives
continued; and
 Full year 2018 operating earnings expected to be within a range of $28.0 million to $31.0
million. This guidance assumes no material adverse events, significant one-off expenses
or major accounting adjustments.

NZX Chief Executive Mark Peterson commented: “I am pleased to report a strong financial
result for the exchange in 2017. It was underpinned by disciplined cost management, efficiency
improvements, and a strong focus on our customers.”

“Business highlights include the performance of our Smartshares Exchange Traded Funds
business, which delivered double-digit growth and record retail application numbers, our dairy
derivatives market, which presents an opportunity for sustained long term profitability for the
exchange, and subscription and license growth in our data and insights business.”

“2017 marked a fundamental reset of NZX as we refreshed our strategy to refocus on the core
markets business. Public markets play a vital and active role in the New Zealand economy and
it is important that we drive initiatives to support this. New Zealand’s capital market must have
more investable product, greater participation, deeper liquidity, and a global presence.”
Business highlights

Core Markets
Revenues in NZX’s core markets business – which includes issuer, participant and data
services; derivatives; and markets operated for Fonterra and the Electricity Authority – were
down 2.3% to $52.3 million, reflecting 2017’s subdued capital raising environment.

Highlights in this business included the performance of NZX’s dairy derivatives market, which
finished the year with record annual trading volumes of 57.2% achieved across its full suite of
dairy contracts, and directly translated into derivatives revenue growth of 60.5% or $1.13
million. The rapid progress of this market in recent years confirms the exchange’s strategic
decision to accelerate it to benchmark status. 2018 will see NZX bolster sales and marketing
efforts and expand global access, and the market’s product set to keep delivering anticipated
growth.


1
Comparisons are to the 2016 financial year
2
Like-for-like excludes impact of 2016 Agri business disposals

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Annual listing fees revenue increased 11.4% on last year largely due to growth in the debt
market, where $3.2 billion of new debt was listed through 20 separate issues. New Debt Market
listings in 2017 included Summerset Group Holdings, Heartland Bank, Property For Industry
and Christchurch City Holdings.

Oceania Healthcare and TIL Logistics Group joined the Main Board in May and November
respectively. NZX welcomed QEX Logistics as its first new listed customer of 2018 last week.

Data and insights revenues increased 3.5% to $11.4 million, driven by a 24.7% increase in
subscriptions and licencing fees, and a 3.1% increase in dairy data subscriptions.

Funds Management & Wealth Technologies
Revenues in NZX’s Funds Management and Wealth Technologies businesses – which
comprises SuperLife superannuation and KiwiSaver, Smartshares Exchange Traded Funds
(ETFs), and NZX Wealth Technologies (NZXWT) – grew 13.5% to $14.8 million. EBITDA
increased 964% to $2.7 million driven by significant growth in Funds Under Management and
the absence of compliance costs associated with the Financial Markets Conduct Act transition.
SuperLife & Smartshares
Funds Under Management (FUM) in the SuperLife business grew 20.4% and membership
numbers increased 4.8%. Total external Smartshares Exchange Traded Funds (ETFs) FUM
increased 43.9% on 2016. Growth continued to climb with record Smartshares ETF application
numbers achieved up 84% – of these applications 49% were first time investors.
NZX Wealth Technologies
Wealth Technologies, a platform which enables advisers and brokers to manage client
investments, is the newest addition to NZX and it continued to progress against several
development initiatives in 2017. Core platform development is expected to complete in Q2 2018
and a large customer is expected to go live in Q3 2018.

Farmers Weekly
NZX has entered into a non-binding indicative term sheet for the sale of its rural newspaper,
Farmers Weekly, as the exchange strategically focuses on growth initiatives that will support its
core markets business. NZX will provide a further update to the market if the transaction is
finalised.

Costs
The strong end to the 2017 financial year was aided by the absence of one-off costs associated
with previous financial years and significant permanent cost savings, which saw like-for-like
operating expenses decline 11.6%. Disciplined cost management by the leadership team also
contributed to this as the exchange’s strategy enabled improved delivery and reallocation of
resources to high value areas.

Dividend
The board has declared a final ordinary dividend of 3.1 cents per share, which is fully imputed
and brings the total ordinary dividend declared for this financial year to 6.1 cents per share. This
is the first increase since 2013, reflecting the board’s confidence that the refreshed strategy will
deliver improved profitability and earnings over the coming years.

The board is pleased to announce it will offer a dividend reinvestment plan (DRP) which will be
in place for the 2018 interim dividend in response to shareholder feedback. The board

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recognises the important role DRP's play in rewarding investors for their loyal support, and it is
a convenient way of reinvesting dividends back into the company's shares. In addition to this,
the board introduced a new dividend policy, which will come into effect for the 2018 financial
year onwards, further information is available in NZX’s annual report.

Guidance
2018 will set the platform for NZX's future growth. The divestment of non-core assets, including
Farmers Weekly, and changes to the clearing and trading pricing structure in the second half of
this year will rebase the 2018 operating result. For the 2018 financial year the board expects
operational earnings to be in the range of $28.0 million to $31.0 million. This is subject to market
outcomes, particularly with respect to initial public offerings, secondary capital raising, equity
trading and derivatives trading volumes. This guidance assumes no material adverse events,
significant one-off expenses or major accounting adjustments. It also assumes no further
acquisitions or divestment.

For further information, please contact:
Media
Hannah Lynch
Head of Communications
T: 09 308 3710
M: 021 252 8990
E: hannah.lynch@nzx.com

Investors
Graham Law
Chief Financial Officer
T: 04 498 2271
M: 029 494 2223
E: graham.law@nzx.com

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NZX Limited
Appendix 1
Results for announcement to the market

Reporting Period 12 months to 31 December 2017
Previous Reporting
Period
12 months to 31 December 2016

Amount (000s) Percentage change
Revenue from ordinary
activities
$NZ 75,325 (2.9)%
Profit (loss) from
ordinary activities after
tax attributable to
security holder.
$NZ 14,837 61.6%
Net profit (loss)
attributable to security
holders.
$NZ 14,837 61.6%

Interim Dividends for
2017 year
Amount per security Imputed amount per
security
Interim first half 2017
dividend paid on 15
September 2017
$NZ 0.0300 $NZ 0.011667
Final Dividend for 2017
year
Amount per security Imputed amount per
security
Final second half 2017
dividend to be paid on
23 March 2018
$NZ 0.0310 $NZ 0.012056
Total 2017 dividend $NZ 0.0610 $NZ 0.023723

Record date Payment date
Interim first half 2017
dividend
1 September 2017 15 September 2017
Final second half 2017
dividend
9 March 2018 23 March 2018

Comments: For additional information please see financial
release attached.

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APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
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
numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state 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
Ratio, e.g
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 priceWithholding Tax(Give details)
Foreign
FDP Credits
Withholding 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:
9 March, 201723 March, 2017
$0.005471
$8,322,768
Date Payable
23 March, 2017
N/A$0.002153$0.012056
$
Enter N/A if not
applicable
In dollars and cents
Ordinary SharesNZNZXE0001S7
04 498 227104 496 28931622018
$0.0310
EMAIL: announce@nzx.com
Notice of event affecting securities
NZX Limited
Graham Law - CFODirectors' Resolution

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Annual Report 2017
NEW ZEALAND’S
EXCHANGE

<Previous
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Contents
04
Word from the Chair
08
CEO Report
13
Management
Commentary
23
Corporate Governance
24
Board of Directors
38
Directors'
Responsibility
Statement
39
Financial Statements
44
Notes to the Financial
Statements
74
Auditor's Report
77
Statutory Information
85
Directory

500
customer meetings
in 2017
More
than
$14.8
61.6%
NPAT
million
25.8%57.2%
Funds Under
Management
Dairy lots
traded
70
More
than
listing rule
review responses
$46.3
11.6%
Operating costs
million
**
84%
Smartshares
retail applications
220
More
than
active derivatives
traders
$29.0
31.3%
Operating earnings
million
**
* Excluding impact of 2016 Agri disposals
** Operating earnings are before net finance expense, income tax, depreciation, amortisation and impairment,
adjustment to provision for earnout, gain and loss on disposal of business and property, plant and equipment
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Highlights 2017

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Word from the
Chair
It has been a busy year for our company driven by a
vital reset of the exchange, as the board established
the right leadership and a renewed strategy to deliver
sustainable growth for our shareholders over the
coming years.
Against the backdrop of Mark Peterson’s appointment
as Chief Executive in April, and the subsequent
development of our strategy, we delivered a strong
financial result with operating earnings of $29.0 million
in 2017, which was at the higher end of our guidance
range. On a like-for-like basis this was 31.3% above
the prior year.
On a like-for-like
1
for basis revenues increased 1.1%
to reach $75.3 million and Net Profit After Tax was
$14.8 million, up 61.6% on 2016.
The 2017 financial year was aided by the absence of
the one-off costs associated with previous financial
years and significant permanent cost savings, which
1Like-for-like excludes impact of 2016 Agri business disposals

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saw operating expenses decline by 11.6% on a like-
for-like basis. Further financial information is included
in the management commentary of this report.
Strategic review
The highlight of 2017, and the board’s number one
focus, was to reset the strategic direction of our
company to provide management with a clear
direction for the next five years.
The board was fully engaged in the redevelopment
of the strategy, and played a central role in the
complete review of NZX’s business, analysing global
market trends and the performance and activities of
our peers. The strategy which resulted from this
process delivers a compelling vision for NZX, with
initiatives that will drive growth, and deliver improved
performance for you, our shareholders.
Continuing to improve our Total Shareholder Return
(TSR) performance remains front of mind for the board
as we work alongside the management team to
execute on our strategy to the benefit of our
shareholders, and our customers in the New Zealand
market.
Total Shareholder Returns
Index=1000 at inception
2003
2005
2007
2009
2011
2013
2015
2017
0
2,000
4,000
6,000
8,000
10,000
*TSR based on 2003 start point of 1000
The board commissioned a review of the company’s
capital structure and dividend policy as part of the
strategic review. A number of recommendations
flowed from the review and the board has carefully
considered these.
Dividend
The board has declared a final ordinary dividend of
3.1 cents per share, which is fully imputed and brings
the total ordinary dividend declared for this financial
year to 6.1 cents per share.
The board has determined that it is appropriate to
introduce a new dividend policy which will come into
effect for the 2018 financial year onwards. The new
policy is to pay between 80% to 110% of adjusted
Net Profit After Tax, subject to maintaining a prudent
level of capital to meet regulatory requirements. The
board considers that a policy based on Net Profit
After Tax is comparable with peers, and provides
sufficient headroom to manage the ongoing capital
structure requirements of the exchange, and pursue
future relevant opportunities should they arise.
The board is pleased to announce it will offer a
dividend reinvestment plan (DRP) which will be in
place for the 2018 interim dividend in response to
shareholder feedback. The board recognises the
important role DRP's play in rewarding investors for
their loyal support, and it is a convenient way of
reinvesting dividends back into the company's shares.
Further details, including the full offer document will
follow in due course.
Capital management
The board has completed a review of the company's
capital structure. We have been consulting on a
2017 operating earnings of $29.0 million
Millions
200320042005200620072008200920102011201220132014201520162017
$0
$5
$10
$15
$20
$25
$30

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mutualised default fund which will advance our
Clearing House's risk model to meet global
standards. This is important to ensure we have the
appropriate Clearing House risk structure to meet the
anticipated growth of our dairy derivatives market.
The board will explore the use of a capital note to
ensure NZX has a more robust balance sheet to
protect the business in the unlikely case of a major
market event.
Divestment of non-core businesses
As part of the strategic review, the board and
leadership are focused on developing opportunities
which are aligned to, and support growth in, our core
market's business. As such, rural newspaper Farmers
Weekly, and the grain data business based in
Australia were deemed non-core.
The strategic focus on our core has resulted in NZX
entering into a non-binding indicative term sheet for
the sale of Farmers Weekly. We will provide the
market with a further update shortly but I would like
to take this opportunity to thank all the staff for their
commitment and enthusiasm to this business.
New Zealand’s exchange
A key outcome of the strategy was to ensure that our
customers and their needs remained core to the
operation and effectiveness of the New Zealand
exchange.
Given this focus we remain disappointed in Xero’s
decision to leave the S&P/NZX 50. The team at NZX
is focused on ensuring our customers have the
support of a world class exchange that enables them
to deliver outstanding investable products and
services globally, while creating wealth for New
Zealand, and value for shareholders.
I would like to take this opportunity to acknowledge
the companies, brokers, policy makers, industry
bodies and investors, who have committed to working
alongside NZX to improve the operation and
effectiveness of the local market. Our refreshed
strategy is a major step change for NZX as we shift
our focus away from a regional stock exchange model
to create strong linkages and partnerships with global
exchanges who are committed to promoting
confidence and co-operation in their respective markets.
We are already executing on this vision and were
pleased to sign a Memorandum of Understanding
with Hong Kong Exchanges and Clearing Limited
(HKEX) in January. The terms of the memorandum
will seek to further promote confidence and
cooperation in Asia-Pacific markets through a range
of market development, green finance and
sustainability intitiatives.
I look forward to updating you on our progress as we
increase the international presence of the exchange,
and as a result the reach and connection of the
market. This offers an opportunity for our listed
issuers to expand into new markets, our participants
will benefit from better connected markets and
capital flows, and investors will enjoy a broader
product offering.
Your board
At last year’s annual shareholders’ meeting, long-
serving director Neil Paviour-Smith retired by rotation.
Neil was an inaugural director when the company
listed in 2003 and during this time made an
outstanding contribution to the market which
extended far beyond his role at NZX. Throughout his
tenure New Zealand’s capital market experienced
significant growth and I personally thank him for his
service and contribution to our company.
Alison Gerry also stood down in April after serving
NZX through an exciting, but challenging time, in our
history.
We welcomed Richard Bodman, Frank Aldridge and
Nigel Babbage to the board in 2017, with these
appointments bringing fresh experience and skills in
key areas of clearing, risk management, equity
markets, funds management and derivatives to NZX.
As I mentioned at our annual meeting in June 2017,
the board has employed a disciplined approach to
ensuring it has the right skills to operate effectively for
shareholders. We remain committed to regularly
assessing the skills and experience needed to run
your business, and are pleased our comprehensive

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skills matrix could be used to identify and appoint
Richard, Frank and Nigel.
Board composition goes to the heart of a board’s
effectiveness and we were pleased to announce last
week that Lindsay Wright will join NZX as a director.
Lindsay is an exceptional talent and brings to the
board more than 30 years’ financial service and funds
management experience both locally and globally. I
am delighted that NZX and the New Zealand market
will benefit from her strong skill set.
I would like to acknowledge the dedication of each
of my fellow directors over the past year. I believe NZX
has a strong and capable board with an extensive and
complimentary set of skills and experience to support
the management team in the execution of our strategy.
As a board we are also committed to growing the
next generation of New Zealand directors and were
pleased to announce our participation in the Future
Directors Programme in May, welcoming our
inaugural participant, Anna Molloy, a former fund
manager and sell-side equity analyst. The programme
has the active support of the New Zealand
Shareholders’ Association, and NZX is pleased to
participate alongside other leading listed companies.
Anna will continue to attend our board meetings as
an observer for an 18 month term.
People and culture
Culture change is key to delivering our strategy and
the improved result of our annual employee
engagement survey in September reflects the
progress being made under Mark’s leadership. This
bodes well for the future as we continue to build an
engaged, delivery focused team.
Having your employees as owners of the business, no
matter how small that ownership may be, is very
rewarding. Share ownership encourages staff to think
like a shareholder and supports engagement. As such
the board will grant each staff member $1,000 worth
of shares, reflecting the significant work undertaken
in respect of the strategy and culture we are creating.
Going forward all new staff members will also receive
$1,000 of shares upon starting at NZX.
We look forward to working alongside Mark and the
leadership team to grow NZX in 2018 and are
confident that as a business, we have prepared and
invested sensibly to position ourselves well for the future.
Guidance
2018 will set the platform for NZX's future growth. The
divestment of non-core assets, including Farmers
Weekly, and changes to the clearing and trading
pricing structure in the second half of this year will
rebase the 2018 operating result. For the 2018
financial year the board expect operational earnings
to be in the range of $28.0 million to $31.0 million.
This is subject to market outcomes, particularly with
respect to initial public offerings, secondary capital
raising, equity trading and derivatives trading
volumes. This guidance assumes no material adverse
events, significant one-off expenses or major
accounting adjustments. It also assumes no further
acquisitions or divestment.
To all the staff at NZX who are serving our customers
– on behalf of the board I thank you for your
commitment to our strategy. At times we operate in
a demanding environment, but I am encouraged by
the passion and enthusiasm you show daily.
Thank you to all our customers and stakeholders
across the capital markets network we appreciate your
support.
I want to close by thanking our shareholders for
trusting and supporting the exchange with their
investment. I believe NZX is well positioned for
continued growth and the refreshed strategy has given
us positive momentum and a clear course to pursue
in the years ahead.
I look forward to updating you on the implementation
and delivery of our strategy at our annual meeting in
Christchurch on 13 April 2017.
Best,
James Miller, Chairman

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NZX leadership team (from left to right): Joost van Amelsfort, Hamish Macdonald, Katherine Birch, Lisa Brock, Mark Peterson, Graham
Law, Jeremy Anderson, Joanna Lawn, Benjamin Phillips, David Godfrey, Hugh Stevens
CEO Report
Standing behind our business in 2017 were more than
13,800 customers, almost 3,700 shareholders, and
237 dedicated employees.
2017 marked a fundamental reset of New Zealand’s
exchange as we refreshed our strategy to renew our
focus on the core markets division and the customer
– many of which are leaders in their own industries and
sit at the heart of our business.
The public capital market plays a vital and active role
in New Zealand’s economy – and a healthy market is
one with wide participation, a growing range of
investable products, and data and insights which
support investment decisions. It was therefore logical
that NZX decided to pursue a strategy that would
refocus back on its core business – the operation of
New Zealand’s equity, debt and derivatives markets.
I am passionate about New Zealand’s capital markets
and am keen to make a difference as NZX’s CEO by
ensuring we play our part in creating a strong
exchange, with a global reach, that delivers for its
customers, stakeholders and shareholders.

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We are committed to delivering for you and for New
Zealand. I hope you find our progress in this report
encouraging.
Delivering on the plan
I am pleased to report a strong financial result for NZX
in 2017. We achieved this result through solid growth
in both our Funds Management and Dairy Derivatives
businesses, and an improved Agri result. This was
against the backdrop of our Core Markets business,
which had lower new issuance revenues, but improved
data growth. The result was also underpinned by an
unrelenting focus on cost management and efficiency
gains.
The development of our strategy was a critical piece
of work in 2017, as was the delivery of several
necessary projects to ensure our business has an
efficient platform to grow from in the years ahead.
To further support our increased delivery efforts and
customer focus, we made positive changes to the
organisation’s structure, and realigned our
remuneration, reward and recognition programme.
We welcomed Joanna Lawn as Head of Issuer
Relationships and Graham Law as Chief Financial
Officer in September and November respectively,
while Hugh Stevens joined earlier this month to lead
the funds management business. All bring strong
capital markets experience, and new energy and drive
to our leadership team.
Our listed issuers are a central pillar of our business
and one of my first priorities as CEO was to create a
dedicated issuer relationship team with two areas of
focus: to provide exceptional service to our equity,
debt and funds issuers, and; to grow the investable
products we have in the New Zealand market.
Our customer engagement levels have already lifted
considerably, with the team engaging with more than
100 customers since Joanna joined in September
2017. While we recognise last year was a quiet year
for new equity issuance, we were pleased to welcome
Oceania Healthcare and TIL Logistics Group to the
Main Board, and Summerset Group Holdings,
Heartland Bank, Property for Industry and Christchurch
City Holdings to the debt market, where $3.2 billion
of new debt was listed through 20 separate issues.
A dedicated secondary market team was also created
to ensure our participants receive a higher level of
engagement, and to ensure that we effectively deliver
initiatives that will lift the liquidity and participation in
the equity, debt and derivatives markets. While
developing our strategy it became clear we needed
to boost our efforts in the secondary market to align
with global standards. Following a successful trial in
2017, NZX will move to a revised pricing structure in
the second half of 2018, which we believe will assist
in attracting new liquidity and participation.
NZX’s dairy derivatives market finished the year with
record trading volumes achieved across its full suite
of futures and options contracts. Volumes traded were
up 57.2% and the number of active traders accessing
our market increased 60% on the prior year. We see
a significant opportunity for sustained and profitable
long term growth in this market. The product set was
extended in December to meet customer demand
with the launch of Skim Milk Powder Options.
Dairy derivatives volume since launch
Volume (lots- thousands)
2010
2011
2012
2013
2014
2015
2016
2017
0
50
100
150
200
250
300
350
The Smartshares and SuperLife businesses are core
to our strategy of growing equity market participation
and providing low cost investment options in the local
share market. Our Smartshares Exchange Traded
Funds (ETF) business had a strong year delivering
43.9% growth in Funds Under Management and
record retail application numbers which were 84%
higher than the prior year. Of particular note, 49% of
these applications were received from first time investors.
We farewelled SuperLife’s previous owner Michael
Chamberlain in December, and acknowledge the very
important contribution he has made to this business.

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Wealth Technologies is the newest addition to NZX.
The team is building a wealth management platform
that will enable advisers and brokers to manage their
clients’ investments. Despite the dedication of the
team, progress on-boarding our first large customer
to the platform has been delayed, however core
platform development is expected to be completed
in Q2 and to go live with that customer in Q3.
Smartshares ETFs total unitholders
2014201520162017
0
20,000
40,000
60,000
80,000
100,000
Maintaining our reputation as a provider of trusted and
reliable market infrastructure will continue as a key
priority and there was significant effort within the
business during 2017 to deliver several key technology
projects. We completed a major life-cycle upgrade to
the clearing and settlement system, moved our New
Zealand based capital market participants to a
modern and robust telecommunications
infrastructure, implemented changes to the way
administrative trading halts are applied, and upgraded
our website NZX.com. These initiatives are already
contributing to the improved efficiency and resilience
of our business and the wider market.
The listing rules under which our core customers –
issuers – operate, form the foundations of the public
market. These rules and the structure of the market
are a key element which NZX can use to grow our
product base and increase participation, and these
are currently under review, having not been
holistically updated since 2003.
Industry feedback is critical to ensuring the changes
to our rules meet the needs of the market, and we
were extremely pleased with the high level of
engagement during phase one of the listing rule
review which closed in November, with approximately
70 quality submissions and survey responses received.
NZIER Report – the economic
contribution of NZX

As part of the background to developing our
strategy, NZX commissioned specialist consulting
firm, NZIER to undertake an independent
assessment of the public market and its direct
and indirect value to the New Zealand economy.
The report confirmed the vital contribution the
public market makes to the local economy, and
the active role the exchange plays in supporting
market health and participation.
It highlighted that the economic and
employment footprint of the public market was
significant, with the combined revenue of
S&P/NZX 50 companies totalling more than
$61 billion. Collectively these companies
generated $24.6 billion of Gross Domestic
Product – some 10% of the entire New Zealand
economy – and paid $2.5 billion in tax annually
which was available to fund Government initiatives.
NZIER’s analysis reinforced the importance of a
public market to the health and wealth of a
nation. This was further validated through a wide
range of market feedback, which stated that a
local exchange plays a critical role in making an
economy function efficiently and effectively,
while providing an opportunity for thousands of
New Zealanders to invest.
The report served to further reinforce NZX’s
strategic decision to refocus on its core markets
business and grow its funds management
business to deliver initiatives to widen
participation, grow investable product, deepen
liquidity and expand the market’s global presence.
In addition, the publication of the NZX Corporate
Governance Code in May was a significant step
forward for the reporting requirements of New
Zealand listed companies, along with the delivery of
the revised Participant Rules in December.

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Our policy team has also taken steps to promote the
growth of a local green bond market releasing a
guidance note in December, and has engaged with
the market as part of the listing rules review, to
improve the accessibility of this investment option to
encourage the development and access of this
emerging product within the market.
Delivering on our strategy — 2018 and beyond
Refocusing on our core
We recognise that our core markets business is NZX’s
fundamental growth platform.
Having a dedicated issuer relationship team in place
means we can focus on promoting the benefits of
listing, improving issuer retention and maximise
listings throughout the economic cycle. On this note,
we are pleased to welcome QEX Logistics as our first
new listed customer in 2018.
Our efforts to develop the secondary market will
increase as we implement a globally competitive
pricing structure, supported by efficient regulation,
broadened participation, and active marketing of the
benefits of our exchange to a global audience – the
New Zealand market has a great story to tell, we just
need to share it more.
Data is an area of increasing opportunity as we take
raw data and develop insights that match customer
demand to help grow our core markets business. We
have a unique opportunity to expand our dairy data
offering and are scoping requirements to create a
dairy information service to support our derivatives
market. In Q2 we will partner with Bloomberg to hold
our first joint marketing events to drive growth and
extend our reach into Asia. We are also exploring
opportunities with other global data vendors.
Growth opportunities
A strong core market provides NZX with an
opportunity to extend and grow our existing
capabilities in additional areas related to our core
strengths. These are New Zealand’s dairy derivatives,
debt and environmental and energy markets.
The progress of the dairy derivatives market confirms
our strategic decision to accelerate it to benchmark
status. Our derivatives business is already competing
globally and making a meaningful contribution to our
revenue and operating earnings lines. In 2018 our
priorities are to boost our sales and marketing efforts
and expand global access and the product set to
deliver the opportunity.
This team is already delivering, with the extension of
market trading hours to meet global requirements on

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track for July, and the addition of further trading
functionality following customer feedback set to be
released in March.
With widespread retail participation already being
achieved in the debt market this product offering has
the ability to assist in setting NZX apart internationally
– recent growth reinforces New Zealanders appetite
for these products. We are exploring several
opportunities which include a wholesale market and
green bond growth to support infrastructure funding,
and we intend to expand on the product set following
the completion of the listing rules review.
Maximise options
There is a significant opportunity in front of our Funds
Management business, with a large unmet need
amongst New Zealand investors to participate in the
local market beyond their involvement in KiwiSaver.
NZX began helping to meet that need more than
three years ago when we extended our suite of
Smartshares ETFs. 2018 is about enhancing this
growth, and building on 2017’s record numbers under
fresh leadership.
We look forward to welcoming our first client to the
Wealth Technologies platform in 2018 and growing
this business.
Closing remarks
Our core market must deliver more investable
product, deeper liquidity levels, greater participation
rates, and achieve a global presence. We have a
strong focus on these elements, and it is imperative
that our team continues to progress our initiatives to
grow New Zealand’s public market. This is critical not
only to success of our company – but the success of
our economy.
NZX delivered a strong financial result in a very busy
year. It was underpinned by a strong customer focus,
efficiency improvements, and a disciplined approach
to cost savings. Our refreshed strategy was a
significant and important piece of work that puts our
business on a strong footing to deliver into the future.
We know we have a lot to do, but are optimistic about
our growth prospects, and most importantly, we are
passionate about playing our part to deliver for the
market and our shareholders.
As I transitioned into my first year as CEO I would like
to take this opportunity to thank the NZX team for the
way they embraced our strategy and the changes to
the organisation that supports it.
I would also like to thank Bevan Miller and Aaron
Jenkins for their service to NZX and wish them well for
the future. Both resigned in 2017 and made
tremendous contributions to our business during
their time here.
To the Board, on behalf of the wider business, thank
you for your support and engagement through what
was a busy and demanding time.
To our shareholders, thank you for your continued
support of our business. I look forward to updating
you on our delivery throughout 2018.
Mark Peterson, Chief Executive

Management
Commentary
Financial results for the year ended
31 December 2017
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Overview
A breakdown of NZX’s financial results by business segment is summarised in the table below.
Year ended 31 December 2017Markets
$000
Agri
$000
Funds
Services
$000
Corporate
$000
Total
$000
Operating revenue52,3508,18414,791-75,325
Operating expenses(12,317)(6,427)(12,066)(15,512)(46,322)
Operating earnings40,0331,7572,725(15,512)29,003
Net finance expenses, tax, depreciation and
amortisation and gain on sale(14,166)
Net profit after tax14,837
Year ended 31 December 2016Markets
$000
Agri
$000
Funds
Services
$000
Corporate
$000
Total
$000
Operating revenue53,57410,93813,032-77,544
Operating expenses(12,442)(10,148)(13,348)(19,089)(55,027)
Operating earnings41,132790(316)(19,089)22,517
Net finance expenses, tax, depreciation and
amortisation and gain on sale
(13,335)
Net profit after tax9,182
Year ended 31 December 2015Markets
$000
Agri
$000
Funds
Services
$000
Corporate
$000
Total
$000
Operating revenue50,37512,09410,682-73,151
Operating expenses(12,874)(11,043)(8,956)(15,699)(48,572)
Operating earnings37,5011,0511,726(15,699)24,579
Net finance expenses, tax, depreciation and
amortisation and gain on sale
(707)
Net profit after tax23,872

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Core Markets
Core Markets revenue
2017
$000
2016
$000
2015
$000
Change
FY17 v FY16
Issuer Relationships revenue24,25726,77024,791(9.4%)
Secondary Markets revenue16,62915,72614,5515.7%
Data & Insights revenue11,46411,07811,0313.5%
Total Core Markets revenue52,35053,57450,373(2.3%)
Revenue and strategic metrics for the Core Markets division are detailed below.
Issuer Relationships
Revenue
2017
$000
2016
$000
2015
$000
Change
FY17 v FY16
Issuer Relationships
Annual listing fees10,2809,2268,58411.4%
Initial listing fees9312,330764(60.0%)
Secondary issuance fees2,6963,3414,042(19.3%)
Other issuer services5861,144770(48.8%)
Development revenue4281,4931,375(71.3%)
Contractual revenue9,3369,2369,2561.1%
Total Issuer Relationships revenue24,25726,77024,791(9.4%)
Strategic metrics
Number of listed issuers223232231(3.9%)
Equity market capitalisation$135.2b$115.5b$110.2b17.1%
Debt market capitalisation$26.4b$25.7b$19.8b2.7%
Number of new equity listings176(85.7%)
Number of new debt listings203726(45.9%)
Value of new equity listed$0.48b$2.1b$1.7b(77.1%)
Value of new debt listed$3.2b$6.4b$8.1b(50.0%)
Total secondary capital raised$4.4b$4.6b$12.9b(4.3%)
Annual listing fees paid by NZX’s equity, debt and fund issuers is driven by the number of listed issuers and
equity and debt market capitalisations. Growth in annual listing fees came from:
• a substantial increase in the number and value of listed debt instruments over the past few years; and
• the growth in equity market capitalisation.
The number of equity issuers declined in 2017 due to delistings as a result of takeovers and liquidations. The
number of debt issuers continued to increase.
Initial listing fees are paid by all issuers at the time of listing. The primary driver of this revenue is the number
of new listings and the value of capital listed. The substantial listing of new debt products in 2016 was not
fully replicated in 2017 resulting in a decrease in initial listing fees.

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Secondary issuance fees are paid by existing issuers when the company raises additional capital through
placements, rights issues, the exercise of options, dividend reinvestment plans, or further debt issues. The
primary driver for this revenue is the number of secondary issuances and the value of secondary capital raised.
Secondary capital raised in 2017 was dominated by new debt listed which came from 20 separate issues.
Other issuer services revenue arises from time spent by NZX Regulation reviewing listing and secondary
capital raising documents, requests for listing rule waivers, and other significant issuer matters.
Contractual and development revenue arises from the operation of New Zealand’s electricity market (under a
long term contract from the Electricity Authority) and the Fonterra Shareholders' Market (under a long term
contract from Fonterra). Development revenue arises on a time and materials basis, there was a lower level
of development and consulting activity in 2017.
The Issuer Relationship team was established in 2017 and is tasked with better servicing NZX’s current and
prospective equity, debt and funds customers. This will contribute to the strategic metrics outlined above and
ensure that New Zealand’s companies are better enabled for growth and are aware of the opportunities that
a public listing creates.
Secondary Markets
Revenue
2017
$000
2016
$000
2015
$000
Change
FY17 v FY16
Secondary Markets
Participant services revenue3,7683,5923,5264.9%
Securities trading revenue5,8175,7654,9760.9%
Securities clearing revenue5,9115,6635,3654.4%
Dairy derivatives revenue1,13370668460.5%
Total Secondary Markets revenue16,62915,72614,5515.7%
Strategic metrics
Number of trades2.05m1.75m1.46m17.1%
Total value traded$44.0b$44.0b$41.7b-
Dairy lots traded311,675198,303213,67757.2%
Number of participants3635362.9%
Participant services revenue is charged to market participants (broking, clearing and advisory firms) that are
accredited for NZX’s equity, debt and derivatives markets. The number of market participants remained
constant in 2017.
Securities trading revenue comes from the execution of trades on NZX’s equity and debt markets. Trading
fees are currently a combination of a fixed fee per trade (approximately 70% of the revenue) and a variable fee
based on the value of the trade. NZX commenced a trial to increase electronic trading flow in July, and this
is reflected in the 2017 trading numbers, with the number of trades out-pacing actual value traded. The trial
did not include a fixed fee per trade component, hence the number of trades exceeds the increase in revenue .
Securities clearing revenue relates to clearing and settlement activities, and a range of securities related
services such as stock lending undertaken by NZX’s subsidiary New Zealand Clearing and Depository
Corporation. The largest component is clearing fees which are based on the value of settled transactions. The
total value traded was similar to 2016 with a slight increase in on-market trading.

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NZX announced changes to its securities trading and clearing pricing structure in December 2017, which will
be implemented alongside rule changes in the second half of 2018. This was in response to market feedback,
and the positive results of the pricing trial. These changes seek to encourage greater on-market liquidity and
price transparency, which is in line with NZX’s strategic commitment to develop the secondary market. The
intention is to migrate to a trading and clearing pricing model in line with global practice and provide
participants greater price certainty when negotiating with their clients. This will lead to securities trading and
clearing revenue being variable based on the value of each trade.
Dairy derivatives revenue relates to trading, clearing and settlement fees for trading NZX dairy futures and
options. The fees are largely charged in USD (reflecting the global nature of the market) per lot traded. There
was a significant increase in trading on the dairy derivatives market in 2017, with traded volumes up 57.2%
on the prior year to 311,675 lots, resulting in a revenue increase of 60.5%. Growth was also reflected in a 60%
increase in the number of active traders accessing the market in 2017.
The Markets Development & Clearing team is tasked with developing the secondary market. This requires
action on multiple fronts, and includes but is not limited to, growing participation, optimising pricing models,
broadening the product suite, and developing efficient regulation.
Data & Insights
Revenue
2017
$000
2016
$000
2015
$000
Change
FY17 v FY16
Data & Insights
Royalties from terminal6,3676,9657,038(8.6%)
Subscriptions and licenses4,0993,2883,27924.7%
Dairy data subscriptions6936724733.1%
Other30515324199.3%
Total Data & Insights revenue11,46411,07811,0313.5%
Strategic metrics
Terminal numbers (12 month average)7,3797,4077,222(0.4%)
Number of licences9792835.4%
Number of proprietary security products subscription4043953812.3%
Number of dairy data products subscription77458444232.5%
Royalties from terminals relate to the provision of capital markets data to global data resellers who
incorporate the data into their own subscription products. Terminal numbers remained relatively flat in 2017.
Subscription and licenses relate to the provision of capital markets data to other participants in the capital
markets. Increased revenue from licence fees has been the result of the implementation of new pricing policy
around Non-Display Applications.
Dairy data subscriptions relate to the sale of dairy data and analytical products. Additional Data & Insights
revenue comes from FundSource and the annual dairy derivatives risk management conference.
The Data & Insights team is tasked with growing existing data revenues, and turning raw data into insights
that drive decisions, particulary those which will support NZX’s Core Markets and dairy derivatives businesses.

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Funds Services
Revenue and strategic metrics for the Funds Services division are detailed in the table below.
Revenue
2017
$000
2016
$000
2015
$000
Change
FY17 v FY16
Funds Management
SuperLife revenue7,8467,0386,43311.5%
Smartshares revenue5,6024,5893,56222.1%
Total Funds Management revenue13,44811,6279,99515.7%
Wealth Technologies
Administration fees1,1631,365689(14.8%)
Development fees18040-350.0%
Total Wealth Technologies revenue1,3431,405689(4.4%)
Total Funds Services revenue14,79113,03210,68413.5%
Strategic metrics
SuperLife member numbers50,30448,01543,7134.8%
SuperLife external FUM$1,999m$1,660m$1,433m20.4%
Smartshares external FUM$701m$487m$440m43.9%
Smartshares SuperLife FUM$1,430m$1,218m$1,050m17.4%
Total Smartshares FUM$2,131m$1,705m$1,490m25.0%
Total Fund Management FUM (external)$2,700m$2,147m$1,873m25.8%
Total Wealth Platform FUA (external)$1,167m$1,292m$1,317m(9.7%)
Funds management revenue is generated from:
• the SuperLife superannuation and KiwiSaver business, being a mix of fixed membership fees and variable
Funds Under Management (FUM) fees; and
• the Smartshares Exchange Traded Funds (ETFs) business, being variable FUM fees.
The growth in SuperLife member numbers and total external FUM has been a driver of the significant increase
in funds management revenue, with the number of members now exceeding 50,000, up 4.8% on 2016.
Smartshares unitholders (the number of investors in each ETF) increased 37.6% in 2017. This was aided by
growth in Smartshares retail business, which saw applications to invest directly in the product increase 84%
on the corresponding period.
Wealth Technologies revenue is generated from administration services provided on the existing wealth
management platform, which NZX acquired on 1 July 2015, and development fees received for part of the
new platform that is in production. The administration fees are based on Funds Under Administration (FUA).

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Client numbers remain the same, however there was a decrease in FUA which drove down revenue. Wealth
Technologies is on track to complete implementation of its first client onto the new platform in 2018.
Agri
Revenue and strategic metrics for the Agri division are detailed in the table below.
Revenue
2017
$000
2016
$000
2015
$000
Change
FY17 v FY16
Publishing revenue5,1646,4518,069(20.0%)
Agri data (non dairy) revenue3,0203,3663,148(10.3%)
Commodities trading revenue-1,121877(100.0%)
Total Agri revenue8,18410,93812,094(25.2%)
Strategic metrics
Total paid advertising page equivalents1,3821,6792,120(17.7%)
Number of NZ Agri (non dairy) products subscription2,3481,8571,74426.4%
Number of Australian agri products subscription1,5141,8201,842(16.8%)
Total tonnes traded-543k452k(100.0%)
Publishing revenue relates to advertising and subscription revenues from the publication of rural newspapers
and magazines. NZX’s two magazine titles were sold effective, 1 November 2016. Subsequent to balance
date, NZX has entered into a non-binding indicative Term Sheet for the disposal of its rural newspaper
(Farmers Weekly), expected to be effective, 1 April 2018. No gain or loss is expected to result from the sale,
should all conditions be met.
Agri data (non-dairy) revenue relates primarily to the sale of subscription data and analytical products in the
Australian grain industry.
Commodities trading revenue related to NZX’s Australian online grain trading market, the Clear Grain
Exchange, which was sold in December 2016.

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Operating Expenses
2017
$000
2016
$000
2015
$000
Changes
2017 v 2016
Gross personnel costs28,91232,70827,68911.6%
Less capitalised labour(3,075)(2,855)(1,638)7.7%
Personnel costs25,83729,85326,05113.5%
Information technology costs7,8077,3036,242(6.9%)
Professional fees2,2965,5935,59958.9%
Marketing, print and distribution2,5943,0643,54915.3%
Fund expenditure3,4893,6602,2804.7%
Other expenses4,2995,5544,85122.6%
Total operating expenses46,32255,02748,57215.8%
Key metrics revenue drivers
Staff numbers (FTEs)238237237-
Personnel costs were made up of:
• Salary costs (including bonuses, commissions, ACC levies and KiwiSaver contributions); and
• Contractor and other personnel costs (including training, recruitment and staff benefits); and
• Net of capitalised labour (where employees or contractors are engaged on capital projects).
Personnel costs reduced significantly due to the completion of several non-capital major projects in 2016 and
the absence of costs associated with the former CEO transition.
IT costs were made up of software licence fees, hardware support and maintenance fees, telecommunications
and data network costs, and IT services provided by third parties.
The increase in costs came from one-off costs relating to IT infrastructure, remediation, migration and
consolidation projects completed in 2017, which will deliver cost savings in future years, and Wealth
Technology data hosting costs relating to new client projects.
Professional fees were made up of legal expenses and advisory and consultancy fees.
The Ralec litigation was completed in 2016 and no costs were incurred in 2017. Other professional fees
decreased slightly, with the Financial Markets Conduct Act transition project completed in 2016, with only
minimal costs incurred in 2017, and these decreases were offset by costs incurred during the company’s
strategic review.
Marketing, print and distribution costs primarily relate to NZX’s agricultural publications. NZX’s two magazine
titles were sold in November 2016. As noted above, NZX has entered into a non-binding indicative Term
Sheet for the disposal of its rural newspaper (Farmers Weekly), expected to be effective, 1 April 2018.

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Fund expenditure represents the cost of operating the SuperLife, and Smartshares schemes, some costs are
fixed (principally outsourced fund accounting and administration costs and registry fees), and some are
variable in proportion to FUM (principally custodian fees, trustee fees, index fees, settlement costs and third
party manager fees). The reduction in fund expenditure was due to the renegotiation of some variable costs,
which more than offset the cost increase arising from growth in FUM.
Other expenses comprise general and administrative expenditure, including rent, travel, insurance, directors’
fees, audit fees and general overheads. There was a significant decrease in rent as duplicate Auckland rents
incurred in 2016 have now ceased, and surplus Wellington office space was sublet in 2017. Management also
applied disciplined cost control across the business in 2017.
Other Income and Expenses
2017
$000
2016
$000
2015
$000
Changes
2017 v 2016
Interest income(880)(943)(1,218)(6.7%)
Interest expense1,3031,2331,197(5.7%)
Net (gain)/loss on foreign exchange(95)83(149)214.5%
Net finance expense/(income)328373(170)12.1%
Depreciation of PP&E1,1161,2941,18913.8%
Amortisation of intangibles5,9266,6425,80110.8%
Total depreciation and amortisation7,0427,9366,99011.3%
Gain on disposal of associate--(11,807)NM
Other (gain)/loss on disposal(6)46729101.3%
Total (gains)/losses(6)467(11,778)101.3%
Share of profit of associate--(411)NM
Impairment expense353793-55.5%
Adjustment to provision for earnout390(731)-(153.4%)
Tax expense6,0594,4976,076(34.7%)
Total Net finance expenses, tax, depreciation and amortisation and
gain on sale14,16613,335707(6.2%)
Net finance expense/(income) comprises interest income (on cash balances, Clearing House risk capital and
regulatory working capital), interest expenses (on loans, overdrafts and earn out) and foreign exchange (gains)/
losses.
The depreciation of property, plant and equipment ($1.116 million) and the amortisation of intangible assets
($5.926 million) are detailed in notes 16 and 2 of the financial statements.

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Gains and losses on disposals and associates in 2016 relate to the sale of the New Zealand rural magazine
titles and the Australian Clear Grain Exchange business (loss: $0.467 million), and in 2015 to the sale of Link
Market Services (gain $11.807 million).
The share of profit of associates relates to NZX’s 50% interest in Link Market Services.
In 2016 NZX impaired the carrying value of the rural magazine publications that were subsequently sold.
Likewise, in 2017 NZX has impaired the carrying value of the Agri businesses that are now in the process of being
sold.
An adjustment to the earn-out provision was required as the acquired SuperLife achieved earn out targets
(based on FUM) resulting in a 100% earn out.
The effective tax rate is higher than the statutory rate of 28% due to non-deductible items. In prior years the
Ralec litigation costs were not tax deductible resulting in higher effective tax rate.

Corporate
Governance
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Board of Directors
James Miller
BCOM, FCA
James was appointed a director in
August 2010 and NZX’s Chair in
May 2015. He spent 14 years
working in the share-broking
industry, with Craigs Investment
Partners, ABN AMRO, Barclays de
Zoete Wedd and ANZ Securities.
He is a qualified chartered
accountant and is a Fellow of the
New Zealand Institute of Chartered
Accountants, a Certified Securities
Analyst Professional, a member of
the Institute of Directors in New
Zealand, and is a graduate of the
Advanced Management Program
at Harvard Business School in the
United States of America.
James is a director of the Accident
Compensation Corporation,
Auckland International Airport and
Mercury NZ. He was an inaugural
director of the Financial Markets
Authority, and previously a member
of the ABN AMRO Securities, INFINZ
and Financial Reporting Standards
Boards.
Dame Therese Walsh
DNZM, BCA, FCA
Dame Therese was appointed as a
director in February 2013. She is
currently Chair of TVNZ, a director
of ASB Bank, Air New Zealand, and
Antarctica NZ, a Trustee of
Wellington Regional Stadium, and
Pro-Chancellor of Victoria
University. She also sits on the
Government’s Major Events
Investment Panel. Previously Dame
Therese 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.
Frank Aldridge
BBS
Frank was appointed as a director
in May 2017. Frank has an extensive
understanding of New Zealand’s
capital markets having spent more
than 20 years working for Craigs
Investments Partners where he is
now Managing Director.
He is currently Chair of Australian-
based Wilsons Advisory and
Stockbroking, former member and
Chair of New Zealand Securities
Association, and sits on several of
Craigs Investment Partners’
subsidiary Boards.
Frank is an accredited NZX
Advisor, Authorised Financial
Adviser (AFA), and a Chartered
Member of the Institute of Directors.

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Nigel Babbage
BCOM, BSC (HONS)
Nigel was appointed as a director
in December 2017. Nigel has spent
more than 30 years working in
financial and capital markets locally
and globally, and brings to NZX
extensive clearing and derivatives
experience.
Nigel previously held executive
roles with British Petroleum (now
BP) and Citibank, managing the New
York currency derivatives desk, and
worked for BNP Paribas, where he
took on the joint role of Global
Head of Currency Derivatives
Trading and Head of North
American Foreign Exchange. He
served on the Foreign Exchange
Committee of the Federal Reserve
Bank of New York for three years.
Nigel is currently CEO of
Christchurch-based investment
company Mohua Investments
Limited.
Richard Bodman

Richard was appointed as a director
in April 2017. Richard has spent
more than 25 years working in the
financial services sector, including
17 years at FNZC (previously First
NZ Capital) where he held several
executive roles, such as Managing
Director, Head of Compliance. Prior
to this Richard spent seven years
as an inspector for the Securities &
Futures Authority in London.
Richard is an independent director
of Forsyth Barr Custodians Limited
and Forsyth Barr Cash Management
Nominees Limited, and a member
of the GRC (Governance Risk
Compliance) Institute and the
Institute of Directors.
He is a trustee of the Scots College
Foundation. Richard has been a
director of FNZC Securities and a
NZX registered Compliance
Manager.
Jon Macdonald
BE (HONS)
Jon was appointed as a director in
May 2013. Jon is CEO of NZX/ASX
listed Trade Me Group and has an
extensive background in
engineering and technology. He
joined Trade Me in 2003 and was
appointed CEO in 2008. Under
Jon's stewardship over the last 10
years, Trade Me has grown from
revenues of $80 million to
$235 million, and now has a market
capitalisation of approximately
$2 billion.
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, which runs the Summer of
Tech programme.
Jon is a Chartered Member of the
Institute of Directors.

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Dr Patrick Strange
BE (HONS), PHD
Dr Patrick was appointed as a
director in May 2015. Patrick has
spent 30 years working as a senior
executive and director in both
private and listed companies,
particularly in the energy sector,
including more than six years as
Chief Executive of Transpower,
where he oversaw $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 senior
roles in Europe and the USA before
returning to New Zealand.
Patrick is Chair of Chorus, a director
of Mercury NZ, Auckland
International Airport and Essential
Energy in Australia.
Anna Molloy
BCOM, BE
Anna was appointed as NZX's
inaugural future director in May
2017. Anna is well known in the New
Zealand market place having spent
almost 15 years working in equity
capital markets, private equity, and
business development roles.
Anna is a former buy-side equity
analyst for Masfen Securities and
Artemis Capital, and prior to that
was a sell-side equity analyst for ABN
AMRO New Zealand, where she
initiated research coverage of NZX
when the company demutualised
and listed in 2003.
Anna is a Chartered Financial
Analyst and graduated from the
University of Auckland with
undergraduate degrees in
Commerce and Engineering.

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Corporate governance
NZX’s shares are quoted on the NZX Main Board. In
this part of the annual report, we disclose the extent
to which we have followed the recommendations set
out in the NZX Corporate Governance Code 2017
(NZX Code). The information in this section is current
as at 19 February 2018 and has been approved by the
board of directors of NZX.
NZX’s board is committed to maintaining the highest
standards of governance by implementing a
framework of structures, practices and processes that
it considers reflect best practice. NZX’s corporate
governance policies and procedures, and its board
and committee charters, document the framework and
have been approved by the board.
The framework has been guided by the
recommendations set out in the NZX Code and the
requirements set out in the NZX Main Board Listing
Rules. The board’s view is that NZX’s corporate
governance structures, practices and processes have
followed these recommendations and requirements
in the year to 31 December 2017 (reporting period),
with one exception. That exception relates to
recommendation 3.6 (takeover protocols). The board
expects to be able to confirm full compliance as at
31 December 2018.
The corporate governance policies and procedures,
and board and committee charters, are regularly
reviewed by the board against the corporate
governance standards set by NZX, any regulatory
changes, and developments in corporate governance
practices.
The key corporate governance documents referred
to in this section are available from NZX’s investor centre.
NZX Code
Principle 1 – code of ethical behaviour

Directors should set high standards of ethical
behaviour, model this behaviour and hold
management accountable for these standards
being followed throughout the organisation.
Code of Conduct
NZX’s Code of Conduct sets out the standards of
conduct expected of directors (including members of
committees) and employees (including secondees,
contractors and consultants). The purpose of the code
is to underpin and support the values that govern our
individual and collective behaviour.
Training on the code is included as part of the
induction process for new directors and employees.
Employees are required to reconfirm their
understanding of the code as part of their annual
performance assessment.
The code requires directors and employees to
promptly report material breaches of the code and
sets out the procedure for doing so.
The code is reviewed at least every two years and was
last reviewed in August 2017.
Financial Products Trading Policy
NZX’s Financial Products Trading Policy sets out
NZX’s restrictions on its directors and employees
buying or selling financial products. In particular:
• directors and employees may not buy or sell NZX’s
shares in the “blackout” periods set out in the
policy (these periods occur prior to the release of
NZX’s financial results to the market)
• outside of a blackout period, directors and
employees must obtain consent to buy or sell
NZX’s shares
Because NZX is a licensed market operator, NZX’s
senior managers and employees with access to

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market sensitive information must obtain consent to
buy or sell financial products quoted on a market
operated by NZX.
Training on the policy is included as part of the
induction process for new directors and employees.
The policy is reviewed at least annually and was last
reviewed in July 2017.
Principle 2 – board composition and
performance

To ensure an effective board, there should be a
balance of independence, skills, knowledge,
experience and perspectives.
Board charter
NZX’s board operates under a written charter, which
sets out the responsibilities and framework for the
operation of the board.
The charter is reviewed at least every two years and
was last reviewed in July 2017.
Management of NZX on a day-to-day basis is
undertaken by the Chief Executive Officer and senior
managers through a set of delegated authorities that
clearly define the Chief Executive Officer’s and senior
managers’ responsibilities and those retained by the
board. The delegated authorities are set out in NZX’s
Delegated Authority Policy. The policy is reviewed at
least annually and was last reviewed in December 2017.
The board meets its responsibilities by receiving
reports and plans from management and through its
annual work programme. The board uses committees
to address issues that require detailed consideration.
Committee-work is undertaken by directors (and, in
the case of the Conflicts Committee and Regulatory
Governance Committee, non-director members who
have specialist knowledge and experience), however,
the board retains ultimate responsibility for the
functions of its committees and determines their
responsibilities.
Nomination and appointment of directors
NZX has recently established a Nomination
Committee, which is responsible for reviewing
candidates for appointment and re-election to the
board and committees, and making recommendations
to the board (prior to the establishment of the
committee, the board was responsible for this). An
independent recruitment consultant provides
assistance in preparing a list of candidates for the
committee’s consideration. The committee meets with
preferred candidates before making a
recommendation to the board. Checks are done on
candidates in accordance with NZX’s Fit and Proper
Policy. Key information about candidates is provided
to shareholders in the notice of annual meeting.
At each annual meeting, one-third of the current
directors retire by rotation and are eligible for re-
election. Any directors appointed since the previous
annual meeting must also retire and are eligible for
election.
NZX uses a skills matrix when selecting candidates for
appointment and re-election to the board. The skills
matrix outlines the experience needed to ensure the
board is equipped to provide the high standard of
corporate governance required to lead NZX.
The board developed the skills matrix in 2016 in
conjunction with governance services firm Propero
Consulting. The matrix assesses directors against the
following criteria:
• strategy and performance – expertise in respect of
stock exchanges, data information, media,
technology and business operations
• quality committee leadership – skills to serve on
NZX’s committees
• connectivity to stakeholder groups – connectivity
to stakeholder groups such as regulators or
government, the Electricity Commission, listed
issuers, brokers or institutional and retail investors
Based on these criteria, the board considers that its
members currently have the balance of
independence, skills, knowledge, experience and
perspectives necessary to lead NZX.

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Further information about the skills matrix is set out
in NZX’s 2017 annual meeting materials, which are
available from NZX’s investor centre.
Written agreement
NZX provides a letter of appointment to each newly
appointed director setting out the terms of their
appointment. The letter includes information
regarding expected time commitments, the board’s
responsibilities, remuneration, independence
requirements, disclosure requirements, confidentiality
obligations, indemnity and insurance provisions,
intellectual property rights and cessation of
appointment.
Director information
The board comprises seven directors with diverse
backgrounds, skills, knowledge, experience and
perspectives. All directors are non-executive and
independent (except for James Miller, who is deemed
to be non-independent under the NZX Main Board
Listing Rules because he is also a director of ACC,
which is a substantial product holder of NZX). Further
information about NZX's directors is available on
pages 24 to 26.
Information in respect of directors’ ownership
interests is available on pages 80 . NZX’s directors are
not formally required to own NZX shares, but are
encouraged to do so.
Diversity
NZX’s Diversity and Inclusion Policy sets out how NZX
will set measurable objectives for achieving diversity
and inclusion, and how it will assess its progress
towards achieving these objectives. The policy also
sets out the diversity and inclusion initiatives NZX
currently has in place, together with the initiatives it
is currently implementing.
The board has not yet set measurable objectives for
achieving diversity and inclusion. NZX will set such
objectives in the first half of 2018. The policy is
reviewed at least annually and was last reviewed in
October 2017.
NZX’s board is made up of seven directors (2016:
six), of which six are male (2016: four) and one is
female (2016: two)
2
. NZX’s executive team is made
up 16 members (2016: 11) of which ten are male
(2016: nine) and six are female (2016: two).
Board gender diversity
Female 14%
Male 86%
Executive team gender diversity
Female 31%
Male 69%
Director training
Directors are expected to understand NZX's
operations and undertake training and education to
enable them to effectively perform their duties. This
includes:
• attending management presentations in respect
of NZX’s operations
• attending presentations on changes in governance,
legal and regulatory frameworks
• attending technical and professional development
courses
• attending presentations from industry experts and
key advisers
• attending the World Federation of Exchanges
(WFE) of which NZX is a member
• receiving regular educational materials
2Another female director has been apppointed with effect, 20 February 2018. In addition, Anna Molloy is NZX's future director and was appointed in May 2017.

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Assessment of director performance
Every second year, director (and committee member)
performance is assessed by a process which includes:
• each director discussing with the board chair, that
director’s contribution to the proceedings of the
board and the performance of the board and its
committees generally
• the rest of the board discussing with the board
chair, the chair’s contribution to the proceedings
of the board and the performance of the board and
its committees generally
A board and individual director performance review
will be undertaken by an independent board review
expert in 2018.
Each committee reviews its performance at least
annually. The board also reviews each committee’s
performance at least annually.
Separation of the Chairperson and Chief
Executive Officer
NZX’s board chair is a different person to NZX’s Chief
Executive Officer.
Principle 3 – committees

The board should use committees where this
will enhance its effectiveness in key areas, while
still retaining board responsibility.
Committees and members
The board uses committees where specialist skills and
experience is required. Six standing committees have
been established to assist the board on matters falling
within their areas of responsibility. Each committee
has authority to undertake any activity set out in its
charter or as authorised by a separate resolution of the
board.
The board and six committees and the members of
each are set below.

Board and committees (as at 31 December 2017)
Board
Audit and Risk
Committee
Human Resources and
Remuneration Committee
Clearing
Committee
Regulatory Governance
Committee
Conflicts
Committee
James Miller (Chair)
Frank Aldridge
Nigel Babbage
Richard Bodman
Jon Macdonald
Dr Patrick Strange
Dame Therese Walsh
Dame Therese Walsh (Chair)
Frank Aldridge
Richard Bodman
Dr Patrick Strange
Richard Bodman (Chair)
Nigel Babbage
Dr Patrick Strange
Dame Therese Walsh (Chair)
Richard Bodman
Jayshree Das
Jon Macdonald
Jon Macdonald (Chair)
Frank Aldridge
James Miller
David Flacks (Chair)
Richard Bodman
Jon Macdonald
Dame Therese Walsh
Nomination
Committee*
James Miller (Chair)
Frank Aldridge
Jon Macdonald
*This committee was established in February 2018

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Director meeting attendance
DirectorBoard
Audit
and RiskClearingConflicts
Human Resources
and RemunerationNomination
1
Regulatory
Governance
Frank Aldridge5/52/2––2/2––
Nigel Babbage
2
––1/1––––
Richard Bodman
3
6/63/31/11/1––4/4
Alison Gerry
4
2/2––1/1–––
Jon Macdonald8/8––2/23/3–4/4
James Miller8/8–––3/3––
Neil Paviour- Smith
5
3/34/4––1/1––
Dr Patrick Strange
6
8/86/61/1––––
Dame Therese Walsh7/86/6–2/2––4/4
1 The Nomination Committee was established in February 2018
2 Nigel Babbage was appointed as an NZX director effective 19 December 2017. Prior to that date, Nigel was an independent member of the Clearing Committee
3 Richard Bodman also attended 2/2 meetings as a director of New Zealand Clearing and Depository Corporation Limited
4 Alison Gerry resigned as an NZX director effective 13 April 2017. Alison also attended 2/2 meetings as a director of New Zealand Clearing and Depository Corporation Limited
5 Neil Paviour-Smith resigned as an NZX director effective 30 June 2017
6 Dr Patrick Strange also attended 3/3 meetings as a director of New Zealand Clearing and Depository Corporation Limited
External committee member meeting attendance
Committee
memberBoard
Audit and
RiskClearingConflicts
Human Resources
and
RemunerationNomination
1
Regulatory
Governance
Jayshree Das–––1/1–––
David Flacks
2
––––––1/1
Derek Johnston
3
––––––3/3
1 The Nomination Committee was established in February 2018
2 David Flacks also attended a Regulatory Governance Committee meeting in his previous capacity as NZ Markets Disciplinary Tribunal chair
3 Derek Johnston resigned as a member of the Regulatory and Governance Committee effective 1 September 2017
Audit committee
NZX’s Audit and Risk Committee assists the board to
fulfil its responsibilities in relation to the NZX Group’s
financial practices and reporting, internal control
environment, internal audit, external audit and risk
management. The committee operates under a written
charter, which sets out the responsibilities and
framework for the operation of the committee. The
charter is reviewed at least every two years and was
last reviewed in February 2018.
The committee must be comprised solely of NZX
directors, have a minimum of three members, have a
majority of members that are independent directors
and have at least one director with an accounting or
financial background. The makeup of the current
members of this committee complies with this
recommendation.
The committee’s chair, Dame Therese Walsh, is a
qualified chartered accountant, and a Fellow of the
Institute of Chartered Accountants of New Zealand.
The committee chair and the board chair are different
people.
Management may only attend meetings at the
invitation of the committee and the committee
routinely has committee-only time and time with the
external and internal auditors without management
present.
Remuneration committee
NZX’s Human Resources and Remuneration
Committee assists the board in overseeing the
management of the human resources activities of
NZX, including the remuneration of employees. The
committee operates under a written charter, which

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sets out the responsibilities and framework for the
operation of the committee. The charter is reviewed
at least every two years and was last reviewed in
February 2018.
The committee must have a majority of members that
are independent directors. The makeup of the current
members of this committee complies with this
recommendation.
Management may only attend meetings at the
invitation of the committee.
Nomination committee
NZX’s Nomination Committee assists the board in
identifying and recommending to the board
individuals for nomination as directors and members
of committees. The committee operates under a
written charter, which sets out the responsibilities and
framework for the operation of the committee. The
charter is reviewed at least every two years and was
adopted in February 2018.
The committee was established in February 2018.
Prior to this, the board was responsible for identifying
individuals for nomination as directors and members
of committees.
The committee must have a majority of members that
are independent directors. The makeup of the current
members of this committee complies with this
recommendation.
Management may only attend meetings at the
invitation of the committee.
Other committees
Clearing committee
The Clearing Committee assists the board in ensuring
that New Zealand Clearing Limited has adequate risk
capital to meet its obligations as the central
counterparty clearing house for NZX Clearing. The
committee operates under a written charter, which
sets out the responsibilities and framework for the
operation of the committee. The charter is reviewed
at least every two years and was last reviewed in
February 2018.
The committee must have a minimum of three
members. The committee may have a non-director
as a member (who must have skills and experience
relevant to the operation of the committee). The
makeup of the current members of this committee
complies with this recommendation.
Conflicts committee
The Conflicts Committee assists the board in
overseeing the effectiveness of NZX’s policies and
procedures for ensuring that any conflicts of interest
within the NZX Group are appropriately managed,
including any conflicts between NZX’s regulatory
responsibilities and its commercial interests. The
committee operates under a written charter, which
sets out the responsibilities and framework for the
operation of the committee. The charter is reviewed
at least every two years and was last reviewed in
February 2018.
The committee must have a minimum of three
members, have a minimum of two directors as
members and have a minimum of one non-director
as a member (who must have skills and experience
relevant to the operation of the committee). The
makeup of the current members of this committee
complies with this recommendation.
The committee’s non-director member, Jayshree Das,
is Craigs Investment Partners’ Process Excellence &
Governance Advisor.
Regulatory Governance committee
The Regulatory Governance Committee assists the
board in reviewing and providing feedback in respect
of the governance of the NZX’s regulatory function.
The committee operates under a written charter,
which sets out the responsibilities and framework for
the operation of the committee. The charter is
reviewed at least every two years and was last
reviewed in February 2018.
The committee must have a minimum of three
members, have a minimum of two directors as
members and have a minimum of one non-director
as a member (who must have skills and experience
relevant to the operation of the committee). The
makeup of the current members of this committee
comply with this recommendation.

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The committee’s non-director member, David Flacks,
is a former NZ Markets Disciplinary Tribunal chair.
Takeover protocol
NZX’s Takeover Protocol sets out the procedure to
be followed if there is a takeover offer for NZX.
The protocol is reviewed at least every two years and
was adopted in February 2018.
Principle 4 – reporting and disclosure

The board should demand integrity in financial
and non-financial reporting, and in the timeliness
and balance of corporate disclosures.
Continuous disclosure
NZX’s Continuous Disclosure Policy sets out NZX’s
arrangements to ensure material information is
identified, reported, assessed and, where required,
disclosed to the market in a timely manner.
NZX is committed to ensuring the timely disclosure
of material information about the NZX Group and to
ensuring that NZX complies with the NZX Main Board
Listing Rules.
It is the responsibility of the board to monitor
compliance with the Continuous Disclosure Policy. The
board considers at each board meeting whether any
information discussed at the meeting requires disclosure.
The policy is reviewed at least annually and was last
reviewed in July 2017.
Charters and policies
The key corporate governance documents referred
to in this section, including policies and charters, are
available from NZX’s investor centre.
Financial reporting
NZX is committed to ensuring integrity and timeliness
in its financial reporting and in providing information
to the market and shareholders which reflects a
considered view on its present and future prospects.
The Audit and Risk Committee oversees the quality
and integrity of external financial reporting, including
the accuracy, completeness, balance and timeliness
of financial statements. It reviews NZX’s full and half
-year financial statements and makes
recommendations to the board concerning accounting
policies, areas of judgement, compliance with
accounting standards, stock exchange and legal
requirements, and the results of the external audit.
All matters required to be addressed and for which the
committee has responsibility were addressed during
the reporting period.
NZX has published its full and half-year financial
statements that were prepared in accordance with
relevant financial standards. These are set out on
pages 39 to 73.
The Chief Executive and Chief Financial Officer have
confirmed in writing to the board that NZX’s external
financial reports present a true and fair view in all
material aspects.
Non-financial reporting
NZX releases data on its non-financial performance
metrics each month through its monthly shareholder
metrics publications. It also releases quarterly revenue
and shareholder metrics, and regulation metrics
representing the key features of NZX’s activities in
regulating its markets.
At this time, NZX does not have a formal
environmental, social and governance (ESG) reporting
framework. However it is in development and will be
progressed for the 2018 financial statements.
Information about NZX’s corporate social
responsibility initiatives is available from NZX’s investor
centre.
Information about NZX’s refreshed strategy, delivery
plan and role within New Zealand’s capital markets is
set out in the NZX Investor Day Presentation 2017,
which is available from NZX’s investor centre.

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Principle 5 – remuneration

The remuneration of directors and executives
should be transparent, fair and reasonable.
Directors’ remuneration
The total remuneration available for directors is fixed
by shareholders. The annual fee pool limit is $435,000
and was approved by shareholders at the annual
meeting in April 2012.
The current fees paid to NZX’s directors are $50,000
per annum for directors and $100,000 for the chair.
Directors are not paid additional fees for being
members of committees.
Jayshree Daas and David Flacks, being non-director
members of committees, are paid $465 per hour for
work on committee business.
Total remuneration received by each director (and
committee member) in 2017 is set out in the table above.
Directors do not receive any performance or equity-
based remuneration, or superannuation or retirement
benefits. This reflects the differences in the role of the
directors, which is to provide oversight and guide
strategy, and the role of management, which is to
operate the business and execute NZX’s strategy.
Remuneration policy
NZX’s Remuneration Policy sets out the principles
which apply to the remuneration of NZX’s directors
and employees. In particular, director remuneration
is paid in the form of director fees, while employee
remuneration will include a mix of the following
components:
• fixed remuneration (which includes base salary and
employer KiwiSaver contributions)
• commission (which is available to employees in
sales roles)
Director remuneration
DirectorDirector fees
Frank Aldridge$33,276
Nigel Babbage
1
$1,785
Richard Bodman
2
$35,926
Alison Gerry
3
$14,306
Jon Macdonald$50,000
James Miller$100,000
Neil Paviour-Smith
4
$25,000
Dr Patrick Strange
5
$50,000
Dame Therese Walsh$50,000
1 Nigel Babbage was appointed as an NZX director effective 19 December 2017. Prior to that date, Nigel was a member of the Clearing Committee and received committee member
fees of $3,985
2 Richard Bodman also recieved $7,185 as a director of New Zealand Clearing and Depository Corporation Limited
3 Alison Gerry resigned as an NZX director effective 13 April 2017. Alison also received $2,861 as a director of New Zealand Clearing and Depository Corporation Limited
4 Neil Paviour-Smith resigned as an NZX director effective 30 June 2018
5 Dr Patrick Strange also received $6,032 as a director of New Zealand Clearing and Depository Corporation Limited
External committee member remuneration
Committee memberCommittee member fees
Jayshree Das$1,500
David Flacks$7,905
Derek Johnston
1
$15,717
1 Derek Johnston resigned as a member of the Regulatory Governance Committee effective 1 September 2017

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• short-term incentive plan (which is available to
senior employees)
• long-term incentive plan (which is available to
members of NZX’s executive team and senior
management)
• a one-off grant of $1,000 of NZX shares when an
employee starts at NZX to ensure that all
employees are shareholders
The policy is reviewed at least annually and was
reviewed in February 2018.
NZX’s short-term incentive plan is performance-
based, with any short-term incentive plan payment
being conditional on (1) NZX’s financial performance
and the employee’s business unit’s performance; and
(2) the employee’s individual performance.
Potential short-term incentive plan payments are
generally between 15% and 45% of base salary,
depending upon the employee’s seniority and role.
Under NZX’s long-term incentive plan, executive team
members and senior managers may be awarded NZX
shares based on NZX’s long-term (generally three
year) performance. The plan is designed to:
• align managers’ rewards with improvement in
shareholder value
• achieve business plans and corporate strategies
• reward performance improvement
• retain key skills and competencies
Chief Executive Officer remuneration
Mark Peterson commenced his role as NZX’s Chief
Executive Officer on 10 April 2017.
Mark’s remuneration is a mix of base salary and short-
term and long-term incentive plan components.
Mark’s base salary for 2017 was $500,000.
Mark’s potential short-term incentive plan payment for
2017 was $500,000 ($250,000 for on-target
performance). Mark’s actual short-term incentive plan
payment for 2017 was $288,768 this will be paid in
February 2018. Mark's 2017 STI comprised two
components. This first component was based on
NZX's financial performance against target. The
second component was based against against a
small number of individual objectives, including the
development of the five year strategy, improving
capital markets engagement, strengthening the senior
team and generating organisational efficiencies. Mark
achieved ahead of target in both components.
Mark is currently allocated a long-term incentive
performance share rights plan to the value of $250,000
each year. Vesting is dependent on NZX meeting
performance hurdles in respect of NZX's total return
to shareholders and its earnings per share for the prior
five year period, and on Mark remaining an employee
at the applicable vesting date. The performance
hurdles are currently being finalised by the board.
Principle 6 – risk management

Directors should have a sound understanding
of the material risks faced by the issuer and how
to manage them. The board should regularly
verify that the issuer has appropriate processes
that identify and manage potential and material
risks.
Risk management framework
The board is responsible for the establishment and
oversight of NZX’s risk management framework,
together with setting NZX’s overall risk tolerance.
Significant risks are discussed at each board meeting,
or as required.
The board has established an Audit and Risk
Committee with responsibility to:
• review and provide feedback in respect of the
principal risks set out in NZX’s risk register
• ensure that management has established a risk
management framework which includes policies and

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procedures to effectively identify, manage and
monitor NZX’s principal risks
• monitor compliance with, and assess the
effectiveness of, the risk management framework
The committee reviews the risk register every quarter.
The committee also reviews the risk management
framework annually. The committee receives reports
on the operation of risk management policies and
procedures.
The executive team and senior management are
required to regularly identify the major risks affecting
the business, record them in the risk register and
develop structures, practices and processes to manage
and monitor these risks.
NZX maintains insurance policies that it considers
adequate to meet its insurable risks.
The board is satisfied that NZX has in place a risk
management framework to effectively identify,
manage and monitor NZX’s principal risks, including
a Conflict Management Policy, Continuous Disclosure
Policy, Delegated Authority Policy, Financial Products
Trading Policy, Fit and Proper Policy, IT Acceptable
Use Policy and Protected Disclosures Policy.
NZX engages EY to carry out internal audit functions
on various parts of its operations, including assessing
the effectiveness of NZX’s risk management policies
and procedures.
Key risks
Business
NZX’s key business risks, together with its strategy to
manage these risks, are set out in the NZX Investor
Day Presentation 2017, which is available from NZX’s
investor centre.
Health and safety
NZX’s Human Resources and Remuneration
Committee is responsible for reviewing and making
recommendations to the board in respect of NZX’s
health and safety policies. The committee ensures
that the systems used to identify and manage health
and safety risks are fit for purpose, and are being
effectively implemented, regularly reviewed and
continuously improved. The committee receives
reports each quarter from the Head of Human
Resources.
Information technology security
NZX considers there is a risk that the security of its
information technology systems could be
compromised. To manage such a risk, NZX’s systems
have been moved to a cloud-based server with
access, security and backups managed by an
independent service provider.
Chief Executive Officer and Chief Financial
Officer assurance
The Chief Executive Officer and Chief Financial Officer
have provided the board with written confirmation
that NZX’s 2017 financial statements are founded on
a sound system of risk management and internal
compliance and control; and that all such systems are
operating efficiently and effectively in all material
respects.
Principle 7 – auditors

The board should ensure the quality and
independence of the external audit process.
NZX’s Audit and Risk Committee makes
recommendations to the board on the appointment
and removal of the external auditor. The committee
also monitors the independence and effectiveness of
the external auditor and reviews and approves any
non-audit services performed by the external auditor.
An External Auditor Independence Policy will be
prepared in 2018 to set out the services that may or
may not be performed by the external auditor.
The committee regularly meets with the external
auditor to approve their terms of engagement, audit
partner rotation (at least every five years) and audit
fee, and to review and provide feedback in respect
of the annual audit plan. A comprehensive review and
formal assessment of the independence and
effectiveness of the external auditor is undertaken
periodically. The committee routinely has time with

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NZX's external auditor, KPMG, without management
present.
KPMG attends the annual meeting, and the lead
audit partner is available to answer questions from
shareholders at that meeting. KPMG attended the
2017 annual meeting.
KPMG has provided the Audit and Risk Committee
with written confirmation that, in their view, they were
able to operate independently during the year.
NZX has appointed EY to perform a number of
internal audit functions. The Audit and Risk Committee
is responsible for overseeing the independence and
objectivity of the internal audit function and for
reviewing and monitoring the internal audit work plan,
reports from internal audit and management
responses. The committee routinely has time with EY
without management present.
Principle 8 – shareholder rights and
relations

The board should respect the rights of
shareholders and foster constructive
relationships with shareholders that encourage
them to engage with the issuer.
Information for shareholders
NZX seeks to ensure that investors understand its
activities by communicating effectively with them and
giving them access to clear and balanced information.
The key information channels are NZX's website, its
media releases, the annual and interim report, and the
annual meeting.
NZX’s investor centre contains annual and interim
reports, investor presentations, dividend information
and other information relating to NZX (including key
corporate governance documents).
Communicating with shareholders
NZX’s investor centre sets out NZX’s Chief Financial
Officer’s and Company Secretary’s contact details for
communications from shareholders. NZX responds to
all shareholder communications within a reasonable
timeframe.
NZX provides options for shareholders to receive and
send communications electronically, to and from both
NZX and its share registrar.
Shareholder voting rights
In accordance with the Companies Act 1993, NZX’s
Constitution and the NZX Main Board Listing Rules,
NZX refers major decisions which may change the
nature of NZX to shareholders for approval.
NZX conducts voting at its shareholder meetings by
way of a poll and on the basis of one share, one vote.
Further information on shareholder voting rights is set
out in NZX’s Constitution.
Notice of annual meeting
NZX’s annual meeting was held on 30 June 2017. The
notice of the meeting was released to the market on
2 June 2017.
From 2018, the notice of the annual meeting will also
be posted on NZX’s investor centre at least 28 days
prior to the meeting. The 2018 meeting will be held
on 13 April 2018 in Christchurch. An audio webcast
of the meeting will be made available to shareholders.

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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 2017 and the results of their
operations and cash flows for the year ended
31 December 2017.
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 2017.
The financial statements were authorised for issue for
and on behalf of the directors on 16 February 2018.
J B Miller
Chairman of the Board
Dame Therese Walsh
Chairman of the Audit
and Risk Committee

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Financial
Statements
Income Statement ................................................40
Statement of Comprehensive Income ..................41
Statement of Changes in Equity............................41
Statement of Financial Position ............................42
Statement of Cash Flows.......................................43
Notes to the Financial Statements
1.Reporting entity and statutory base...............44
2.Intangible assets.............................................47
3.Goodwill..........................................................48
4.Impairment tests.............................................49
5.Segment reporting..........................................51
6.Gain and loss on disposal of businesses and
property, plant and equipment.......................52
7.Assets held for sale.........................................53
8.Adjustment to provision for earnout...............53
9.Operating revenue..........................................54
10.Operating expenses........................................55
11.Funds held on behalf of third parties..............56
12.Taxation...........................................................57
13.Earnings per share and net tangible assets
per share.........................................................58
14.Cash and cash equivalents, bank overdraft
and cash flow reconciliation............................60
15.Receivables and prepayments........................61
16.Property, plant and equipment.......................61
17.Trade payables................................................62
18.Other liabilities................................................63
19.Term loan........................................................63
20.Shares on issue...............................................64
21.Dividends........................................................64
22.Share based payments....................................65
23.Financial instruments .....................................66
24.Related party transactions..............................71
25.Lease commitments as leasee........................72
26.Contingent liabilities.......................................73
27.Capital commitments......................................73
28.Subsequent events.........................................73

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40The accompanying notes form an integral part of these financial statements
Income Statement
For the year ended 31 December 2017
Note
2017
$000
2016
$000
Total operating revenue975,32577,544
Operating expenses
Personnel costs(25,837)(29,853)
Information technology(7,807)(7,303)
Professional fees10(2,296)(5,593)
Marketing, printing and distribution(2,594)(3,064)
Funds expenditure(3,489)(3,660)
Other expenses10(4,299)(5,554)
Total operating expenses(46,322)(55,027)
Earnings before net finance expense, income tax, depreciation, amortisation and
impairment, adjustment to provision for earnout, gain and loss on disposal of
business and property, plant and equipment
29,00322,517
Interest income880943
Interest expense(1,303)(1,233)
Net gain/(loss) on foreign exchange95(83)
Net finance expense(328)(373)
Gain/(loss) on disposal of businesses and property, plant and equipment66(467)
Depreciation and amortisation expense(7,042)(7,936)
Impairment expense4(353)(793)
Adjustment to provision for earnout8(390)731
Profit before income tax20,89613,679
Income tax expense12(6,059)(4,497)
Profit for the year14,8379,182
Earnings per share
Basic (cents per share)135.53.4
Diluted (cents per share)135.53.4

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The accompanying notes form an integral part of these financial statements41
Statement of Comprehensive Income
For the year ended 31 December 2017
2017
$000
2016
$000
Profit for the year14,8379,182
Other comprehensive income recognised through equity
Foreign currency translation differences(53)5
Total other comprehensive income(53)5
Total comprehensive income for the year14,7849,187
Statement of Changes in Equity
For the year ended 31 December 2017
Note
Share
Capital
$000
Retained
Earnings
$000
Translation
Reserve
$000
Total Equity
$000
Balance at 1 January 201647,22828,76717376,168
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 paid21-(16,094)-(16,094)
Issue of shares2069--69
Share based payments20345--345
Cancellation of non-vesting shares20(86)86--
Total transactions with owners recorded directly
in equity
328(16,008)-(15,680)
Balance at 31 December 201647,55621,94117869,675
Profit for the year-14,837-14,837
Foreign currency translation differences--(53)(53)
Total comprehensive income for the year-14,837(53)14,784
Transactions with owners recorded directly
in equity:
Dividends paid21-(16,104)-(16,104)
Share based payments20368--368
Cancellation of non-vesting shares20(473)473--
Total transactions with owners recorded directly
in equity
(105)(15,631)-(15,736)
Balance at 31 December 201747,45121,14712568,723

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42The accompanying notes form an integral part of these financial statements
Statement of Financial Position
As at 31 December 2017
Note
2017
$000
2016
$000
Current assets
Cash and cash equivalents1414,88110,804
Cash and cash equivalents - restricted1420,00020,000
Funds held on behalf of third parties1158,89070,847
Receivables and prepayments1510,94015,923
Total current assets104,711117,574
Non-current assets
Property, plant & equipment162,4443,259
Goodwill333,92935,764
Other intangible assets236,29037,367
Assets held for sale72,415-
Total non-current assets75,07876,390
Total assets179,789193,964
Current liabilities
Funds held on behalf of third parties1158,89070,847
Trade payables173,8105,632
Other liabilities1823,58013,803
Current tax liability12666591
Total current liabilities86,94690,873
Non-current liabilities
Non-current other liabilities18-9,093
Term loan1920,00020,000
Deferred tax liability124,1204,323
Total non-current liabilities24,12033,416
Total liabilities111,066124,289
Net assets68,72369,675
Equity
Share capital47,45147,556
Retained earnings21,14721,941
Translation reserve125178
Total equity attributable to shareholders68,72369,675

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The accompanying notes form an integral part of these financial statements43
Statement of Cash Flows
For the year ended 31 December 2017
Note
2017
$000
2016
$000
Cash flows from operating activities
Receipts from customers78,94274,784
Net interest (paid)/received(92)77
Payments to suppliers and employees(48,394)(53,463)
Income tax paid12b(6,072)(7,824)
Net cash provided by operating activities1424,38413,574
Cash flows from investing activities
Proceeds from the sale of associate-563
Cash acquired/(paid) on acquisition/disposal of businesses7(541)
Payments for property, plant and equipment(302)(1,105)
Payments for intangible assets(5,782)(5,886)
Net cash used in investing activities(6,077)(6,969)
Cash flows from financing activities
Proceeds from former CEO share scheme settlement22a1,874-
Dividends paid21(16,104)(16,094)
Net cash used in financing activities(14,230)(16,094)
Net increase/(decrease) in cash and cash equivalents4,077(9,489)
Cash and cash equivalents at the beginning of the year30,80440,293
Cash and cash equivalents at the end of the year1434,88130,804

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Notes to the Financial Statements
For the year ended 31 December 2017
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 the Companies Act 1993 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 2017. 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 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.
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.
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after 1 January 2018, and have not been applied in preparing these financial statements. The
Group does not plan to adopt these standards early. The standards which are relevant to the Group are as follows:
i.NZ IFRS 9 Financial instruments - effective for reporting periods beginning on or after 1 January 2018
This standard has three main areas:
• Classification and measurement of financial assets and liabilities;
• Impairment of financial assets; and
• Hedge accounting
The Group has performed an initial assessment and based on the nature of its financial assets and financial
liabilities does not expect there to be any significant effect on the financial statements from adopting this standard.

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ii.NZ IFRS 15 Revenue from Contracts with Customers - effective for reporting periods beginning on or
after 1 January 2018
This standard contains new requirements for the recognition of revenue and involves an assessment of
performance obligations within contracts, allocation of the contract price to those performance obligations
and recognition of revenue as the performance obligations are satisfied.
The Group has performed an initial assessment of revenue recognition for a sample of its more complex
contracts which did not result in any change in the current revenue recognition for these contracts. Based on
this assessment the Group does not expect there to be any significant effect on the financial statements from
adopting this standard.
iii. NZ IFRS 16 Leases - effective for reporting periods beginning on or after 1 January 2019
This standard requires recognition of leases in the Statement of Financial Position through recognising a right
to use asset and corresponding lease liability. This also results in changes in the Income Statement with an
interest expense on the liability and depreciation of the asset replacing the rental expense.
An indication of the potential impact is derived from Note 25 Lease commitments as lease. This shows future
lease payments that will be classified differently in the Income Statement following application of the standard.
Presentational changes

Certain amounts in the comparative information have been reclassified to ensure consistency with the current
period's presentation.
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
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 22 - share based payments

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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
• Brands, Trademarks, and rights to use Brands: 10 years
• Data archives, customer lists, databases, and other IP: 0 —10 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 201641,0707,9063,38718,1162,37172,850
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
Additions----5,7825,782
Disposals(601)----(601)
Transfer from WIP6,873---(6,873)-
Transfer to assets held for sale-(5,336)---(5,336)
Balance at 31 December 201739,7852,5703,38718,1164,63668,494
Accumulated amortisation &
impairment
Balance at 1 January 201628,0784,982-789-33,849
Amortisation expense5,474208167793-6,642
Impairment expense-793---793
Disposals(10,002)----(10,002)
Balance at 31 December 201623,5505,9831671,582-31,282
Amortisation expense4,728214195789-5,926
Impairment expense--277--277
Disposals(601)----(601)
Transfer to assets held for sale-(4,680)---(4,680)
Balance at 31 December 201727,6771,5176392,371-32,204
Net Book Value
As at 31 December 20169,9631,9233,22016,5345,72737,367
As at 31 December 201712,1081,0532,74815,7454,63636,290
3. Goodwill
Carrying amount
2017
$000
2016
$000
Balance at beginning of the year35,76435,764
Agri impairment(76)-
Transfer to assets held for sale(1,759)-
Balance at end of the year33,92935,764
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

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future performance and other relevant factors. For the year ended 31 December 2017, the directors have
carried out impairment tests (the key assumptions used are set out in note 4), which resulted in a $76,000
impairment of goodwill in the Agri business which has been classified as assets held for sale.
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 2017 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 House6,942---6,942-6,942
Grain information unit1751,5776-1,7583,0084,766
Funds management34613,4062,34415116,24720,73036,977
Wealth Technologies411--4,0694,4801,4945,974
Energy2,247--3462,5937,72010,313
Direct data317551,458-2,2449773,221
Other
Other intangible assets301---301-301
Other computer software1,655--701,725-1,725
12,10815,7383,8084,63636,29033,92970,219
Impairment test

For the year ended 31 December 2017, 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 2016
unless indicated otherwise. Discounted cash flow analysis using a forecast period of five years was used for
all CGUs, other than Energy where forecast periods of seven years (match the remaining contractual period)
and ten years (match the remaining contractual period plus three years potentially to be renewed) were both
used. The analysis also used an independently assessed WACC of 10.35% (2016: 10.35%) for New Zealand
CGUs and 12.76% (2016: 12.76%) for Australian CGUs (and were stress tested at higher rates). Terminal
growth rate used to extrapolate cash flow projections beyond five years is between 1.75% and 2%.
Management has assessed the long term economic outlook data available, and assessed that the use of a
terminal growth rate between 1.75% and 2% in 2017 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, with the exception of the Agri business. NZX recognised

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an impairment expense of $353,000 (being $76,000 for Goodwill and $277,000 for intantible assets) in relation
to the Agri business. No other impairment charges are required at 31 December 2017. In 2016, NZX
recognised an impairment expense of $793,000 in relation to part of Agri publication business, which were
subsequently sold as part of the disposal of the Group's rural magazine titles sold in November 2016.
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 1% to 50% (2016: 3%
to 36%) of their respective underlying markets by the end of the forecast period (currently this range is 1% to
58%). This assumption is based on trading statistics for similar derivative products in overseas markets and
NZX's five year strategic plan.
b. 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 2.1%. The Company considers this reasonable based on historical experience.
c.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 3.0% pa to
18.0% pa during the explicit forecast period.
d. Wealth Technologies
Other than the general assumptions outlined above, the principal assumptions on which the discounted cash
flows for the Wealth Technologies CGU are dependent is the future revenue growth rate which is assumed to
be within a range of 10% to 195% during the forecast period. The Company considers this reasonable given
the start-up nature of Wealth Technologies and based on the continued interest from potential customers.
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 30 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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f.Direct data
Other than the general assumptions outlined above, the principal assumptions on which the discounted cash
flows for the Direct Data CGU are dependent is the future revenue growth rate which is assumed to be within
a range of 1.5% to 2% during the explicit forecast period. The Company considers this reasonable based on
historical experience.
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. The reportable segments are:
• Markets - operator and regulator of securities and derivatives markets and provider of trading, post-trade
and data services for securities, derivatives and dairy products, as well as the provider of a central securities
depository. It also includes the Fonterra Shareholders' Market and the energy market business, which
comprises the contracts operated on behalf of the Electricity Authority. Following a strategy review
compeleted in November 2017, the Markets segment is further split into three main reportable business
units: Issuer Relationships, Secondary Markets, and Data & Insights. The new reporting structure will be
effective from January 2018.
• 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 2017
Markets
$000
Agri
$000
Funds
Services
$000
Corporate
$000
Total
$000
Operating revenue52,3508,18414,791-75,325
Operating expenses(12,317)(6,427)(12,066)(15,512)(46,322)
Total segment result40,0331,7572,725(15,512)29,003
Segment assets110,8369,40449,53110,018179,789
Segment liabilities(66,047)(1,798)(15,471)(27,750)(111,066)
Net assets44,7897,60634,060(17,732)68,723

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Segmental information for the year ended 31 December 2016
Markets
$000
Agri
$000
Funds
Services
$000
Corporate
$000
Total
$000
Operating revenue53,57410,93813,032-77,544
Operating expenses(12,442)(10,148)(13,348)(19,089)(55,027)
Total segment result41,132790(316)(19,089)22,517
Segment assets124,73410,61746,82211,791193,964
Segment liabilities(77,875)(1,925)(15,525)(28,964)(124,289)
Net assets46,8598,69231,297(17,173)69,675
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
2017
$000
2016
$000
New Zealand61,46563,000
Australia4,8766,139
Other8,9848,405
Total revenue75,32577,544
Non-current assets
2017
$000
2016
$000
New Zealand71,34772,491
Australia3,7313,899
Total non-current assets75,07876,390
6. Gain and loss on disposal of businesses and property, plant and equipment
2017
$000
2016
$000
Gain on disposal of property, plant and equipment62
Loss on disposal of business - Clear Grain Exchange-(469)
6(467)
In 2016, 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. Assets held for sale
During 2017, management committed to a plan to sell part of the Agri and data services businesses.
Accordingly, those assets are presented as a disposal group held for sale. Efforts to sell the disposal group
have started and a sale is expected by mid 2018.
a.Impairment losses relating to the disposal group
Impairement losses of $353,000 for write-downs of the disposal group to the lower of its carrying amount and
its fair value have been recognised (refer to note 4).
b. Assets of disposal group held for sale
As 31 December 2017, the disposal group was stated at fair value and comprised the following assets:
2017
$000
2017
$000
2017
$000
NZ AgriData ServicesTotal
Goodwill1,4363231,759
Intangible assets544112656
Assets held for sale1,9804352,415
8. Adjustment to provision for earnout
At 30 June 2016, the Group reassessed the probability of meeting the earnout targets for NZX Wealth
Technologies and reduced the provision by $352,000. The Group subsequently reduced the provision by
$903,000 to nil at 31 December 2016 when it became clear that the targets would not be met. The earnout
deadline passed during the current year with no amount payable.
The earnout receivable from the sale of Link Market Services in 2015 was received in 2016 and $60,000 of
earnout provision was recognised to adjust the accrued earnout receivable in December 2016. 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. At 31 December 2016 the provision was increased by $464,000 to 95%. As
31 December 2017 the provision was further increased by $390,000 to 100% reflecting the fact that funds
under management were greater than the 100% of the earnout target (refer note 18).

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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) 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.
(2) 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.
(3) 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.
(4) Trading fees, from the trading of debt and equities securities, are recognised at trade date.
(5) Fees for debt and equity clearing and settlement, which are recognised at settlement date (currently
two days after initial trade date).
(6) Fees for the trading and clearing of derivatives and commodities are recognised at trade date. Fees
for derivative market settlement are recognised at settlement date (currently one day after contract
expiry date).
(7) Securities information revenue 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.

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2017
$000
2016
$000
Listing fees13,90714,897
Other issuer services5861,144
Market operations9,76410,729
Total Issuer Relationships revenue24,25726,770
Participant services3,7683,592
Securities trading5,8175,765
Securities clearing5,9115,663
Dairy derivatives1,133706
Total Secondary Markets revenue16,62915,726
Securities information10,77110,406
Dairy data subscriptions693672
Total Data & Insights revenue11,46411,078
Markets operating revenue52,35053,574
Commodities trading-1,121
Agri information8,1849,817
Agri operating revenue8,18410,938
Wealth platform fees1,3431,405
Funds management13,44811,627
Funds Services operating revenue14,79113,032
Total operating revenue75,32577,544
10. Operating expenses
Professional fees comprise:
2017
$000
2016
$000
Legal expenses(263)(3,560)
Other professional fees(2,033)(2,033)
Total professional fees(2,296)(5,593)
Legal expenses for 2016 includes $3.0 million incurred in relation to the Ralec litigation. Final settlement was
reached between the parties to the dispute on 1 December 2016. No further legal expeses for Ralec occured
in 2017.

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Other expenses comprise:
2017
$000
2016
$000
Operating lease rental expense(1,530)(1,832)
Directors' fees(377)(370)
Remuneration paid to Group auditors(270)(321)
Remuneration paid to other auditors(3)(3)
Other operating expenses(2,119)(3,028)
Total other expenses(4,299)(5,554)
Remuneration paid to Group auditors
2017
$000
2016
$000
Audit and review of NZX Group and subsidiary statutory financial statements(122)(128)
Audit of statutory financial statements for funds managed by Smartshares Limited, an NZX subsidiary(105)(153)
Total audit fees(227)(281)
Annual operational audit of the Clearing House(33)(35)
Annual depository assurance engagement of New Zealand Depository Limited(5)(5)
Funds registry audit(2)-
Net Tangible Assets procedures engagement of Smartshares Limited(3)-
Total other audit related services(43)(40)
Total fees paid to the auditor(270)(321)
11. Funds held on behalf of third parties
2017
$000
2016
$000
Bond deposits1,4861,506
Collateral deposits41,90257,794
Funds held on behalf of clients15,50211,547
58,89070,847
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.
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.

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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.
12. Taxation
a.Income tax expense recognised in profit or loss
2017
$000
2016
$000
Tax expense comprises:
Current tax expense6,4386,119
Prior period adjustment14-
Deferred tax relating to the origination and reversal of temporary differences(393)(1,622)
Total tax expense6,0594,497
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:
2017
$000
2016
$000
Profit before income tax expense20,89613,679
Income tax calculated at 28%(5,851)(3,830)
Non-deductible expenses(194)(667)
(6,045)(4,497)
Under provision of income tax in prior year(14)-
(6,059)(4,497)
b. Current tax liabilities
2017
$000
2016
$000
Balance at beginning of the year(591)(2,113)
Current year charge(6,402)(6,165)
Prior period adjustment255(137)
Tax paid6,0727,824
Balance at end of year(666)(591)

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c.Deferred tax liability
2017
$000
2016
$000
Balance at beginning of the year(4,323)(5,938)
Current year movement3921,622
Prior period adjustments(189)(7)
Balance at end of the year(4,120)(4,323)
Deferred tax balance comprises:
Employee entitlements691867
Doubtful debts111147
Property, plant and equipment, and software(5,026)(5,643)
Other104306
(4,120)(4,323)
d. Imputation credit account
2017
$000
2016
$000
Imputation credits available for use in subsequent reporting periods11,33212,694
13. Earnings per share and net tangible assets per share
i.Earnings per share
Basic earnings per share at 31 December 2017 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 22) is made to weighted average number
of shares used in the calculation of the diluted earnings per share at 31 December 2017.
a. Basic earnings per share
2017
$000
2016
$000
Profit for the year ($000)14,8379,182
Weighted average number of ordinary shares for the purpose of earnings per share (in thousands)268,437267,914
Basic earnings per share (cents per share)5.53.4
b. Diluted earnings per share
2017
$000
2016
$000
Profit for the year ($000)14,8379,182
Weighted average number of ordinary shares for the purpose of earnings per share (in thousands)270,867269,696
Fully diluted earnings per share (cents per share)5.53.4

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ii.Net tangible assets per share
Basic net tangible assets per share at 31 December 2017 is calculated by dividing the net tangible assets at
31 December 2017 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 22) is
made to weighted average number of shares used in the calculation of the diluted net tangible asssets per
share at 31 December 2017.
a. Basic net tangible assets per share
2017
$000
2016
$000
Net assets68,72369,675
Less:
Goodwill(33,929)(35,764)
Other intangible assets(36,290)(37,367)
Assets held for sale(2,415)-
Net tangible assets(3,911)(3,456)
Weighted average number of ordinary shares for the purpose of net tangible assets per share (in
thousands)
268,437267,914
Basic net tangible assets per share (cents per share)(1.5)(1.3)
b. Diluted net tangbile assets per share
2017
$000
2016
$000
Net assets68,72369,675
Less:
Goodwill(33,929)(35,764)
Other intangible assets(36,290)(37,367)
Assets held for sale(2,415)-
Net tangible assets(3,911)(3,456)
Weighted average number of ordinary shares for the purpose of net tangible assets per share (in
thousands)
270,867269,696
Fully diluted net tangible assets per share (cents per share)(1.4)(1.3)

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14. Cash and cash equivalents, bank overdraft and cash flow reconciliation
a.Cash and cash equivalents
Cash comprises:
2017
$000
2016
$000
Cash at bank14,88110,804
Cash and cash equivalents14,88110,804
Cash at bank - restricted10,00010,000
Bank deposits - restricted10,00010,000
Cash and cash equivalents - restricted20,00020,000
Cash and cash equivalents - total34,88130,804
The restricted cash and cash equivalent balance at 31 December 2017 relates to balances held for risk capital
requirements by the Clearing House and is not available for general cash management use by the Group.
b. 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
2017 was 3.93% (2016: 3.85%). The overdraft is undrawn at 31 December 2016 and 2017.
c.Reconciliation of profit for the year to net cash provided by operating activities
2017
$000
2016
$000
Profit for the year14,8379,182
Adjustments for:
Share based payment bonus accrual406470
Non cash interest expense on investing activity501357
Depreciation and amortisation expense7,0427,936
Impairment in intangible and goodwill353793
Disposal of assets(6)365
Provision for earnout390(731)
Decrease/(increase) in receivables and prepayments3,124(3,118)
(Decrease)increase in trade payables and other liabilities(2,135)1,457
Increase/(decrease) in current tax liability75(1,522)
(Decrease) in deferred tax liability(203)(1,615)
Net cash provided by operating activities24,38413,574

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15. 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.
2017
$000
2016
$000
Trade receivables7,1419,807
Provision for doubtful debts(403)(560)
6,7389,247
Sundry debtors1,5531,791
Prepayments2,2842,204
Accrued interest6676
Accrued income299746
Financial asset - current amount-1,859
Total current receivables and prepayments10,94015,923
The current financial asset at 31 December 2016 represented the loan owed by the former CEO under the
CEO share plan, as described in note 22 . The loan and interest were fully repaid by the former CEO in October
2017.
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.
2017
$000
2016
$000
Balance at beginning of the year(560)(302)
Amounts written off during the year22-
Decrease/(increase) in provision recognised in profit or loss135(258)
Balance at end of the year(403)(560)
16. 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.

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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
Total
$000
Net book value at 1 January 20167917451,926453,507
Additions during the year81916794251,105
Depreciation expense for the year(694)(320)(239)(41)(1,294)
Disposals during the year(37)(9)(7)(6)(59)
Net book value at 31 December 20168795831,774233,259
Additions during the year23864--302
Depreciation expense for the year(536)(319)(243)(18)(1,116)
Disposals during the year(1)---(1)
Net book value at 31 December 20175803281,53152,444
17. 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.
2017
$000
2016
$000
Trade payables556607
Goods and services tax payable5861,090
Accrued expenses2,6633,834
Accrued interest5101
3,8105,632

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18. Other liabilities
2017
$000
2016
$000
Employee benefits5,0505,530
Unearned income8,5608,273
Deferred consideration on SuperLife acquisition9,970-
Total current other liabilities23,58013,803
Non current - deferred consideration on SuperLife acquisition-9,093
Total other liabilities23,58022,896
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 Funds
Under Management (FUM) over a three year period ending 31 December 2017. These further payments, if
targets were achieved, were $5.0 million of NZX ordinary shares at an issue price of $1.21 per share (issued
January 2016) and up to $8.0 million together with any interest payable in cash, dependant on the growth in
FUM over the three year earnout period.
The average FUM for December 2017 was $1.98 billion , which was greater than the 100% earnout target of
$1.57 billion, and the Group has accrued for 100% (2016: 95%) of the full $8.0 million together with
$1.97 million interest payable at 31 December 2017.
19. Term loan
2017
$000
2016
$000
Current--
Non-current20,00020,000
Total term loans20,00020,000
The $20.0 million term loan has an expiry date of 15 January 2020. 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 2017 was 2.735% (31 December 2016: 2.60%).

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20. Shares on issue
The Company had 268,476,385 fully paid ordinary shares as at 31 December 2017 (2016: 268,315,689 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
(2016: 1,575,000 fully paid ordinary shares) originally issued under the CEO share plan as outlined in note 22 .
At 31 December 2017 the Company has 2,546,533 restricted shares (2016: 2,018,493 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 2016263,919,54647,228
Issue of fully paid ordinary shares4,396,14369
Share based contingent consideration accrued-345
Non-vesting shares-(86)
Balance at 31 December 2016268,315,68947,556
Issue of fully paid ordinary shares160,696-
Share based payments-368
Non-vesting shares-(473)
Balance at 31 December 2017268,476,38547,451
21. Dividends
20172016
For year
ended
Cents per
share
Total $000Cents per
share
Total $000
Dividends declared and paid
March 201631 Dec 153.008,043
September 201631 Dec 163.008,051
March 201731 Dec 163.008,050
September 201731 Dec 173.008,054
Total dividends paid for the year6.0016,1046.0016,094
Refer to note 28 for details of the final 2017 dividend.

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22. Share based payments
a.Former CEO share plan
A CEO share scheme was in place under the former CEO's employment contract. The scheme continued in
place until its conclusion as part of the 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 was funded by a loan from NZX, which incurred interest at NZX's cost of bank
funding. The shares were entitled to dividends and were 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) exceeded a margin of 1% over NZX's
weighted average cost of capital (to be determined annually by the board), the former CEO would have
received a taxable bonus equivalent to the amount of the loan and would have received 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 was set at $1.10, which was the price on the release day of the Interim results
for the period ended 30 June 2012 (20 August 2012) under the previous CEO. If the hurdle rate was not met,
then on expiry of the scheme the former CEO would not receive the bonus, would be required to repay the
loan from his own resources, and would receive a transfer of shares, or elect not to receive the shares and they
would be disposed of to repay the loan.
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
• Historic volatility (NZX share price): 29%
In October 2017, the Group assessed the CEO share scheme on vesting. The TSR over the scheme period
was 51.07%, which was below the 76.20% of WACC Hundle over the scheme period. The Performance Target
(TSR less the WACC Hurdle) was negative 25.13%. In accordance with the former CEO's employment
contract, as the Performance Target had not been met, the former CEO elected for the shares to be sold and
for the loan of $1,874,250 to be repaid with the proceeds in October 2017.
The Group reclassified within Equity the $383,000 fair value of the shares which was fully recognised prior to
2017. The former CEO share scheme was fully closed by 31 December 2017.

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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 20163161.21203
Shares issued2,3111.09303
Shares transferred to NZX employees(196)1.21429
Redemptions(412)1.06796
Balance at 31 December 20162,0191.10500
Shares issued9591.01668
Shares transferred to NZX employees(161)1.22981
Redemptions(271)1.19926
Balance at 31 December 20172,5461.05381
The Group reclassified within Equity $90,000 fair value of the Restricted Shares issued under the Result Plan
for 2014, which was recognised prior to 2017, as the performance target has not been met.
Total financial assistance provided by NZX under the Team & Results Plan as at 31 December 2017 was
$2,683,000 (2016: $2,231,000).
23. 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).
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

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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 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 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:
2017
$000
2016
$000
Not past due4,7064,818
Past due 0 - 30 days9841,514
Past due > 30 days1,4513,475
7,1419,807
In summary, trade receivables are determined to be impaired as follows:
2017
$000
2016
$000
Gross trade receivables7,1419,807
Individual impairment(94)(153)
Collective impairment(309)(407)
6,7389,247

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The movement in the allowance for impairment in respect of trade and other receivables during the year is set
out in note 15(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.
The interest period for the Term Debt ($20m) 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 2017 and 2016 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.

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2017
$000
2016
$000
Effect on net interest income:
1% increase in interest rate386274
1% decrease in interest rate(386)(274)
This above information is calculated using the Group's cash balances, the Group's term debt, and the bank
balances of $22.2 million (2016: $15.7 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 2017(20,571)(547)(20,024)--
31 December 2016(21,040)(520)(20,520)--
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.