Annual Report 2014
Chatham Islands Enterprise Trust and Subsidiaries Financial Statements for the Year Ended 30 June 2014
Contents
Page
Chairman’s Report
1-2
Chief Executive’s Report
3-5
Companies Reports
6 - 11
Financial Summary
12 - 14
Statement of Comprehensive Income
15
Statement of Changes in Equity
16
Statement of Financial Position
17
Statement of Cash Flows
18
Notes to the Financial Statements
19 - 58
Audit Report
59 - 61
Trading Companies
62 - 68
Chatham Islands Enterprise Trust Report of the Chairman
I am pleased to present the Annual Report for the Chatham Islands Enterprise Trust for the 2013/2014 financial year. It has been another year of vigorous activity and accomplishment. This report focuses on the Strategic accomplishments and overall Trust financial position. Details of the trading company operations and results can be found within the applicable company report. Financial The overall consolidated result for the Enterprise Trust showed comprehensive income of $1,561,722 and despite some ups and downs within the company results, the operating result was above budget for the 2013/14 year. Our investments continue to perform well with gross income of $286,321 for the year, being a 6.13% return. The profit figure varies to the original budget due to these main contributions: 1)
Partial recognition of income from government funding for the Pitt Island Wharf - $2,248,892.
2)
Gifting of the Pitt Island Barge - $846,742.
3)
Impairment/write off of Waitangi Wharf and Pitt Island Wharf - $199,271.
4)
Gain in value of forestry - $215,934.
5)
Gain on sale of the Baldur - $118,750.
6)
Impairment of the Southern Tiare - $956,751.
7)
Adjusting for these one off items results in a net profit of $956,638 from normal operations.
Thanks to the tight financial rein of our management team, overall expenditure has been kept in check and ended on budget with very few unbudgeted expenses. Within its charitable role, the Trust has invested significantly in community organisations, individuals, facilities and vital services by way of loans, grants, donations and awards in total amounting to $92,131. Strategic Referring to the adopted 2013 Annual Plan, it is pleasing to report that our strategic direction has been adhered to and that the majority of initiatives have been either completed or are well in progress. Activity Trustees, along with the community, recognise the vital importance of maintaining and upgrading our facilities and infrastructure, as much as possible and within our means. To this end, upgrade and modification work has continued at the Chatham Islands Airport. Maintenance and upgrading continues on the electricity network and generation plant. Our relationship with CBD, our wind turbine partners, continues to grow as we find ways to better utilise the power being produced. Wind penetration this year peaked at 38%, which exceeds the original target penetration estimates. The result being that for yet another year, electricity rates remained static with no tariff increase. Prudent management of fuel purchasing has also benefited both the electricity company and the community on the whole. Despite volatility in wholesale diesel fuel prices, our bulk storage volumes and ability to purchase reasonable quantities on the spot market and to get it to the Island, has allowed our fuel trading division to maintain the same retail diesel price for the entire reporting year. The quota company continues to expand its investment in local quota and to explore ways to increase returns to the Islands, there being some significant gains and improved returns this last year, mainly from underutilised deep sea
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 1
quota. Although only a small portion of our oyster quota was harvested last season, it was delightful to have this delicacy on local menus for the first time in many years. Chatham Islands Shipping has achieved a remarkable turnaround posting a small loss of $43,460. After adding back the holding costs for the Baldur whilst it was tied up prior to sale, the trading profit was $55,000. This is entirely in-line with the company’s strategic and budgetary intent. It is pleasing to report that both the Chatham’s trade and external revenue has increased, as confidence grows in our own shipping line. The Company still faces a number of challenges so it is not out of the woods yet. There may yet be a need for shareholders to recapitalise to resolve cash-flow issues. Management and port company directors have worked hard securing funding and developing contracts, all the while keeping our existing wharf structures safe and operational. Considerable energy has gone into the ports arena this last year, which now is paying dividends towards securing sustainable all weather post facilities for our Islands. Accomplishments As part of the Trusts overall contribution towards the two port upgrade, the new Pitt Island Barge was commissioned, built and delivered this last financial year. As planned, it proved timely that the new barge was put into service just as the work on the Flowerpot Wharf was commencing, the barge being a vital component to ensure that heavy equipment could be safely transported to the site. Further to this and after much lobbying and numerous ministerial visits, funding for the replacement Flowerpot Wharf was approved by the Department of Internal Affairs in January. Work commenced on the site in early March and is scheduled for completion towards the end of September 2014. Funding has also been gained from DIA for the Better Business Case for the Waitangi Wharf replacement. After several disturbing engineering reports highlighting the extremely poor condition of the wharf and numerous restrictions being put in place, this project has now been prioritised and fast-tracked with construction being planned to commence in early 2015. Consultants and designers are working closely with the wharf users group as we speak to finalise plans which will be presented to the community via the Users Group for consultation and feedback. Other notable accomplishments include the purchase and retention on Island of 50T of Blue Cod and other quota and continued close work with CIC on the combined administration facility and site. On behalf of the community, the Trust has made a number of written submissions this last year including the proposed Chatham Rise phosphate harvesting, CAA requirements, energy report and the Waitangi Wharf Better Business Case. Relationships Through openness, communication and honesty, the Trust has continued to build on the invaluable relationships with the Council, community groups, organisations and the Crown. Our ability to communicate with numerous government and private sector industries with a clear consistent message is and will continue to pay dividends for our people and economy. Acknowledgements The Enterprise Trust works with many organisations and individuals in order to provide the best possible service and outcomes for the community. Along with all our staff, contractors, our dedicated legal and financial team, trustees and directors, I wish to thank every single one for their passion and commitment, to what has been a reasonably satisfying year. I especially wish to thank the government ministers who have travelled to the Chatham’s and committed themselves to ensure that the people of the Chatham Islands receive the same level of opportunity as all other New Zealanders. Two people that must be mentioned in particular. Minister Chris Finlayson, whose drive and energy is nothing short of remarkable and who has contributed so much for the Chatham’s cause. Also Brian Harris, our dedicated CEO for the last 3 years who is unfortunately departing for a well-earned retirement. Brian has done an outstanding job leading our governance and management teams and has contributed beyond the call of duty to the overall success of the Trust. Much thanks and indebtedness. Of course little would be achieved without a level of teamwork, a belief in ourselves and you, our beneficiaries.
Brent Mallinson Chairman Chatham Islands Enterprise Trust PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 2
Chatham Islands Enterprise Trust Report of the Chief Executive I have pleasure in reporting my 4th and final report as Chief Executive of the Enterprise Trust. As previously advised, my tenure as CEO has come to an end and I would like to personally acknowledge the support I have received from all sectors of the community that has made the time that Rosemarie and I have had on the Chatham Islands a pleasurable and memorable experience. There has been little change in the key drivers that have a significant influence on economic growth and the development of a strong local economy. The need for adequate infrastructure to support business growth and affordable transportation and energy costs are essential if we are to encourage local and overseas investment. Good progress has been made in a number of areas and it will be important that the positive momentum be maintained during the new financial year. Once again I would like to acknowledge the support provided by trustees and company directors throughout the year. Both Phil and Jason Seymour were replaced by Paul Smith and Latoya Hough and I wish to recognise the contributions made by Phil and Jason in their governance of the Trust and the companies they represented and wish Paul and Latoya well in their new roles. Finally I would like to thank all of the staff who continue to work very hard in the best interests of the Trust and the community they serve. We have a small but very dedicated group of people that I believe are a real credit to the company they represent. Each of the company chairpersons have reported on their individual business activities and articulated their key future strategic plans. I wish to make some brief additional comments in support of those reports. Quota Staff and directors continued their discussions with various parties with the objective of adding value to our fish resources for the mutual benefit of all sectors of the industry. The company was successful in purchasing the total quota package resulting from the Port Hutt Fisheries liquidation. A proportion of the BCO4 quota was offered back to Chatham Islands fishers at the purchase price. The quota company has lodged a submission with the hearing authority against granting of a mining licence for CI Rock Phosphate. This has been on the basis that there is a lack of conclusive evidence that the mining activity will not have any deleterious effect on the normal migratory processes of both eel and lobster larvae and the potential commercial and cultural impacts this will have on our fishery. The quota company has also supported both Iwi and Imi by being a joint signatory to a submission to MPI against any changes to the deemed value rate for bluenose. All parties are also financially contributing towards a report being collated by Raymond Necklen in support of the formation of a BNS4 area and as a consequence the opportunity to gain some BNS quota and protect our deep sea processing initiatives on-Island. Airport The company turned in another better than budgeted result for the year on the back of improved revenues and good control of operating costs. The capital and maintenance programme continued with the completion of the external boundary fencing, new water tanks installed and repairs to the building piles. Painting to the interest has commenced and this work, along with the replacement of carpet and lino, will be completed this year. Ports Once again the company recorded a slightly better than budget financial performance. This is on the back of increased inspection and maintenance costs being incurred on the Waitangi Wharf as part of the mitigation plan to provide a safe working environment for all ports users and employees. Funding from Central Government for the Pitt Wharf project has been received and all work is well underway on the construction of the new facility. Dependent on weather conditions it is hoped that the new facility will be commissioned in October. Morrison Low has been appointed to complete the “Better Business Case” on the proposed new Waitangi Wharf for Treasury. A cabinet paper has been prepared seeking $3 million to enable the preliminary works to be completed this year in anticipation of the balance of the funding being approved and available in the 15/16 financial year.
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Electricity The company achieved a return to profitability with a $43,493 profit for the year. Wind generation continues to provide a vital contribution to our energy network and displace diesel. Our wind partners, CBD have recently entered into an agreement with CIEL to provide discounted wind energy beyond the existing level in an attempt to stimulate additional consumption through the network. To this end we have reached a heads of agreement with the senior management of AFL for the Moana Pacific factory to join our network and I am hopeful that when this report is tabled this process will have commenced. Management have also presented a report to the Minister of Energy proposing a micro-hydro and biogas energy system to largely displace our diesel generation at a capital cost of $4.5 million. If this proposal was to be accepted it would future proof our consumers from escalating fuel prices and provide a more cost effective energy source. Tourism Good progress continues to be made through the auspices of the Visitor Industry Group under the leadership of Toni Gregory-Hunt. Through the Maori Tourism Board, Toni was able to facilitate the attendance of our two major accommodation providers at a Trade Show in Auckland. This well attended event gave us the opportunity to promote our Islands with the Tourism Operators along with making some valuable contacts. Pitt Island Barge The new barge is now operational under the management of the Pitt Island Barge Society. It has been well utilised already by the Pitt community with their new wharf project. Fuel Fuel pricing was able to be maintained at consistent levels throughout the year with the odd spike being negated by our bulk fuels facility. The high NZ$ against both the US and Euro currencies is likely to keep fuel pricing at a steady level in the foreseeable future. Central Government Liaison Management have maintained a close association with politicians and government department officials throughout the year. Several visists to Wellington have been undertaken to lobby ministers on Chatham Islands matters and a number of politicians have been regular visitors to our shores. I am particularly indebted to Minister Turia, Dunne and Finlayson for the huge passion and commitment they have made to ensuring our Island continues to move positively forward. Shipping Services I wish to acknowledge the positive progress that both mangaement and governance of the shipping company have achieved over the past year. The positive financial result is testament to the hard work that all staff have contributed during the past year. Economic Development During the year a number of economic development opportunities were assessed for their commercial viability and sustainability for the Island. The proposed deep water extraction of rock phosphate from the Chathams Rise is currently before the EPA to establish suitability for the potential granting of a marine consent. MPI granted the Hokotehi Moriori Trust, Ngati Mutunga O Wharekauri Iwi Trust and Enterprise Trust joint application for a special permit through to 2018 to conduct the scientific work to establish sustainability of the glass eel fishery on the Island. We are currently considering the benefits of a joint venture proposal with Rangitane in the Manawatu for this project work. Community Groups I wish to compliment all community groups and organisations for their desire to work in a cohesive way to ensure the best interest of the Chatham Islands are maintained and enhanced. I am particularly indebted to Hokotehi Moriori Trust, Ngati Mutunga O Wharekauri Iwi Trust, Federated Farmers, DOC, CRA6 and Pauamac4 for their continued support on community related matters.
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Joint Community Facilities Central government, along with the Council and Trust, continue to investigate the feasibility of a joint administrative facility to replace their existing facilities that are at the end of their useful life. If successful, it is hoped to include a number of other community organisations within the project with the bulk of the funding being sourced through various ministerial portfolio grants. The project is being approached on a section by section basis and I wish to congratulate the Museum for their successful funding application which will enable the building of a new, enlarged facility regardless of the outcome of the balance of the project. Conclusion Both the Council and the Trust have continued to work closely together on matters where a cohesive and coordinated approach will assist in a positive outcome. Once again I wish to acknowledge the support and guidance provided by the mayor and councillors and Owen and his staff with these matters. Finally, there are a number of initiatives currently on the table that individually and collectively have the potential to positively influence the direction and development of the Chatham Islands. I would like to wish Rob and his staff every success in achieving the best outcomes for the existing and future inhabitants of the Chatham Islands.
Brian Harris Chief Executive Officer
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Chatham Islands Electricity Limited Report of the Chairman Chatham Islands Electricity provides reticulated power to approximately 205 consumers via 55 kilometres of overhead and 11kms of underground line, sourced from diesel (65%) and wind (35%) generators. It has three distinct business units. These being power generation, reticulation and chargeable works. Its mission is to provide the lowest possible power price, to provide good power quality and to maintain existing assets in good condition. As a consequence of sound budgeting by directors and management the financial result for 2013/14 is a modest, greater than budgeted outcome. The company has continued to invest in, and maintain its assets in accordance with the 10 year maintenance asset plan, and has provided good power quality, at the lowest possible price. It has been identified and accepted by both management and directors that additional consumption will result in greater efficiencies and thus a reduction in tariffs to all consumers. Therefore, work is ongoing with local industry, specifically Moana Pacific, a significant commercial power consumer, to join the network. Further to this, a constructive and productive working partnership with CBD, our wind turbine partners has been successfully developed during the year. The goal being a reduced tariff from CBD for any and all additional consumption. An agreement currently sits with CBD. With regard to strategic direction, the company recognises its reliance and ultimate exposure to fossil fuel generation. As a result, its long term strategic direction is to invest in and develop sustainable and renewable energy generation, specifically micro hydro and biogas. Work is ongoing and remains a priority to both management and directors of the company to secure external funding for these initiatives. Further trial plantings of miscanthus are planned on “marginal land” this coming season. I acknowledge management and staff of the electricity company for the valuable efforts throughout the year. Directors Interest Steve Joyce is a customer of CIE. He also provides plumbing services to the company as required. The directors have no other declared interests in any financial transaction of the company. Share Dealings There were no share dealings though the year. Remuneration of Directors Directors fees paid or due and payable to directors for services are disclosed in the financial statements. Use of Company Information During the year no notices were received from directors requesting to use company information in their capacity as directors, which would have not otherwise been available to them.
Paul Smith Chairman
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Chatham Islands Quota Holdings Limited Report of the Chairwoman
Chatham Islands Quota Holdings (CIQH) continues to grow, achieving this year a pleasing surplus of $1,392,290, mainly due to increased quota holdings. CIQH successfully tendered for and purchased a large package of quota which became available as a result of the Port Hutt liquidation. This was a rare opportunity, and this purchase means CIQH now owns a significant portion of the BCO4 TAC. Twenty one tonnes of BCO4 was then onsold to 5 local fishers at the original purchase price. The harvest of oysters for the season was disappointing. Although the logistics of the sampling requirements were difficult, this was achieved. However, the oysters were small, and it is thought the beds need roughing up. We look to improving harvesting methods next season. The Trust and the two iwi groups have approved the funding to engage Raymond Necklen to prepare a submission on our behalf in an endeavour to secure some Bluenose quota to assist in the development our deep sea fishery. A submission has been lodged with the EPA opposing the proposed extraction of rock phosphate from the Chathams Rise, on the basis that there is not conclusive evidence that the activity will not have any deleterious effect on the normal migratory processes of both eel and lobster larvae and the potential commercial and cultural impacts this will have on our fishery. I take this opportunity to thank my fellow directors, Dave and Carol for their commitment and wisdom. Denise, as usual, thank you for a job well done. Brian, a huge thanks for your efforts and farewell. Directors Interests The directors have declared the following interests with the company during the year: During the year, Dave Sharp was engaged as a fisheries advisor on an as required basis. Donna Gregory-Hunt has a family member who purchases quota at market rates from the company. Share Dealings There have been no share dealings through the year. Remuneration of Directors Directors fees paid or due and payable to directors, for services are disclosed in the financial statements. Use of Company Information During the year no notices were received from directors requesting to use company information received in their capacity as directors, which would not have been otherwise available to them.
Donna Gregory-Hunt Chairwoman
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Chatham Islands Airport Limited Report of the Chairman
The Chatham Islands Airport Company has continued to operate in compliance with relevant New Zealand Civil Aviation Rules, and in accordance with its current mission statement. A fair amount of routine and catch-up maintenance has been achieved over the past 12 months, and huge thanks must go to the able and competent management of these projects by Toni Gregory-Hunt and Brian Harris. Works carried out include: Projects Completed Interior refurbishment of terminal building Repairs and maintenance to piles of terminal building Water reticulation structure Boundary fencing repairs Terms and conditions of use agreement for airport users Projects Started Painting of interior and exterior of terminal building Projects Planned Sewage system maintenance Financial Performance The company once again achieved a better than budget financial performance and it is pleasing to note a further improvement in revenues. An asset management plan has been developed by Toni Gregory-Hunt, under guidance from director Stuart Hughes, which helps keep the company aware of, and manage its assets. This, along with its strategic and annual business plan, ensures the Chatham Island Airport company is operating as best it can in a challenging environment. Finally, thanks to fellow directors Latoya Hough and Stuart Hughes for their time and support throughout the year. Directors Interests The directors have no declared interests in any financial transactions of the company. Share Dealings There have been no share dealings this financial year. Remuneration of Directors Directors fees paid or due or due payable are disclosed in the financial statements. Use of Company Information During the year, no notices were received from directors requesting to use company information received in their capacity as directors which would not have otherwise been available to them.
Darron Kyle Chairman
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Chatham Islands Ports Limited Report of the Chairman
Chatham Islands Ports Company directors and management have continued working toward developing facilities that meet the needs of all Chatham Islanders, statutory and compliance standards and eventually will provide all weather access for our shipping operators. The Pitt Island Barge Society have taken charge of the new Pitt Island Barge which, although funded by the Enterprise Trust, was within the Port company portfolio and was successfully concluded on time, to budget and is performing to specification. Downer has started work on the redevelopment on the Pitt Island Port area. Work is progressing well with completion looking likely in late spring. A Waitangi port group has been formed from representatives of port users, council, farmers and the community to assist Morrison Low in building a better business case on behalf of Central Government as part of the overall plan to replace Waitangi Port. Chatham Islands Ports continues to monitor the structural integrity of the wharf on a monthly basis, with a six monthly report by a structural engineer, Josh Thomas as Ports Officer, oversees the maintenance and operations and assists the engineer. On behalf of Directors I would like to thank him for a job well done. I would also like to acknowledge the contributions from Jason Seymour as a Port Company Director and welcome Latoya Hough onboard as a Director who replaces Jason. I would also like to thank Stuart Hughes whose extensive knowledge and experience around port operations has been extremely invaluable. Financial The Port company are budgeting for a similar financial result in the 2014/15 year. Directors Interests The directors have no declared interests in any financial transactions of the company. Share Dealings There were no share dealings through the year. Remuneration of Directors Directors fees paid or due and payable to directors, for services are disclosed in the financial statements. Use of Company Information During the year, no notices were received from directors requesting to use company information received in there capacity as directors, which would have otherwise been available to them.
Greg Horler Chairman
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Chatham Islands Shipping Limited Report of the Chairman
I am pleased to present the Annual Report for Chathams Islands Shipping Ltd (“CISL”). Chatham Islands Shipping Ltd is 51% owned by the people of the Chatham Islands and 49% owned by Dennis Nisbet. The Company presently leases the vessel ‘Southern Tiare’ from Chatham Islands Asset Holdings Ltd, a 100% Trust owned charitable entity on behalf of all Chatham Islanders. This, the company’s second full year, has been a challenging but rewarding one with numerous highs and lows. The results for the first half of the year was disappointing due largely to not being able to dispose of the Baldur and to missing out on many one-off projects that we priced. The management team’s persistence paid off during the second half of the year with a very pleasing year end trading result. The reporting trading loss was $43,640 but after adding back holding costs relating to the Baldur whilst it was tied up mean a trading profit from operations of $55,000. This was for a total turnover of $3,143,690 against a budget of $2,647,200. The remarkable turnaround was due to several factors, the eventual disposal of the Baldur significantly reducing monthly berthage and maintenance costs, some extra charter work for the Tiare, increased freight volumes to and from Chatham and Pitt Island, and the Pitt Island wharf project which all contributed to the positive end result. It is also pleasing to report that, as of year-end, all creditors, loans, interest payments were current. Cash flow issues have again been one of the major challenges as the business grows thus several lease payments were in arrears for an extended period, however these have since been cleared. It should be borne in mind that CIET received a commercial return from CISL via the Tiare lease and the intercompany loans, presently standing at $350,000. CISL has not made principle payments this year, but has budgeted for the next financial year to reduce loan principle by $100,000. Expenditure across the majority of accounts was very close to budget. Tiare costs was within 2% of budget, administration within 0.9% of budget and total operating expenses just 6.3% over budget despite ever increasing costs. On the negative, Port costs were significantly over budget by almost 75%, due to price increases, more frequent calls and the Baldur being tied up longer than planned. Throughout the year, directors and management have focused on vessel utilization, therefore it is pleasing to report that the Southern Tiare is fully committed in terms of its schedule for the immediate period. For the reporting year, the Tiare completed 20 Chatham return voyages and the Baldur 4. Although the schedule might be full, there is still significant scope to carry more freight, especially from Timaru. The company aim to increase recovery through improved Chatham’s cargo volumes can be applied to debt reduction in the first instance and freight price reductions in the second. The CISL Board will continue to concentrate on utilization wherever that may be. Despite having spare capacity on the Tiare much of the time, we have managed to maintain freight rates throughout the year with no increases. Livestock numbers this year have increased, perhaps a sign that confidence is growing on the farm front. We are forming better relationships and understanding with the numerous livestock agents we deal with, our collective desire to deliver your livestock in the best condition and shortest duration possible. Animal health issues have been extremely minimal with the vast majority of livestock reportedly travelling very well, no doubt due to the fully complying pen and ventilation systems and the ability of the Tiare to provide a smooth ride even in rough conditions. To this end we are extremely pleased with the performance of the Tiare, including the livestock and cargo handling systems, even under adverse weather & sea conditions. Throughout the year we have endeavored to keep the community fully informed via monthly newsletters, the Chatham Islander, CCF notices and our own website. During the year, CISL acquired a second livestock truck, 8x4 Isuzu flatdeck with a 4 deck sheep crate. In terms of CISL and the Trusts overall objectives, we are pleased at having achieved at least some of our primary goals, those being, maintaining freight rates, providing and open and honest service and providing more than required capacity to allow growth and to increase confidence. There is still much to achieve to get the company where we want it to be, so this year will be a year of consolidation, continued improvement on both service delivery, performance and efficiency. We have obtained additional work to supplement the Chathams trade and no longer need to carry the costs of the Baldur, thus we have budgeted a healthy surplus for this next financial year. Directors and management now face the challenge of keeping everyone happy and maintaining our schedule. As always, our priority is to serve the people of the Chathams, through a viable and financially independent business.
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None of the above could have been achieved without the passionate and dedicated people around us. The management team, Dennis and Deena who I know work long and hard to meet your needs, and our Waitangi crew, Robert, Simon, Richard, Ryan. Thanks also to our amazing ship crew, Sione and the Boys who have once again proved that they are up to the job. Also and our NZ based team, Loretta, Vinnie and Leanne who play such a vital role keeping cargo on track, customers happy the pennies rolling in. Lastly, a big thank you to all our customers, suppliers, contractors, CIET management and trustees and our beneficiaries who have all contributed to making your own shipping line successful. Directors Interests Dennis Nisbet director is a shareholder and director of Transport & Marine Limited which has dealings at market rate with the company. The directors used the services of Chatham Islands Shipping Limited but these were all at normal market rates offered to all customers. Share Dealings There were no share dealings through the year. Remuneration of Directors Directors fees paid or due and payable to directors, for services are disclosed in the financial statements. Use of Company Information During the year, no notices were received from directors requesting to use company information received in there capacity as directors, which would have otherwise been available to them.
Brent Mallinson Chairman
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Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Financial Summary The following graphs depict the financial performance and position of the trust and subsidiary operations. These graphs are not audited.
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Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Financial Summary
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Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Financial Summary
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Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Statement of Comprehensive Income
Notes
Group 30-Jun-14 NZ$
INCOME Income from Trading Companies Dividend Income Sundry Income Grant Income Change in Fair Value of Forestry Assets Gain on Sale of Forestry Assets South Coast Lines Adjustment to Fair Value Gain/(Loss) on Sale of Fixed Assets TOTAL INCOME
13 20 8 9 4 $
EXPENDITURE Cost of Sales of Trading Companies Operating Expenses Administration Expenses Directors Fees Emmission Trading Scheme Expense Grants and Donations Trustees Fees and Disbursements Fair Value Adjustment Gifting - Pitt Island Barge Depreciation Impairment write off Trading Losses of Trading Companies Funded TOTAL EXPENDITURE OPERATING SURPLUS/(DEFICIT)
5 14
14 8 9 9 14 0 $ 0 $
Interest Income Interest Expenditure NET FINANCE INCOME SURPLUS/(DEFICIT) FOR THE YEAR
0 $
OTHER COMPREHENSIVE INCOME Change in Fair Value of Equities Gain/(Loss) (Surplus)/Deficit Transferred to Minority Interest Foreign exchange gain/(loss) TOTAL OTHER COMPREHENSIVE INCOME TOTAL COMPREHENSIVE INCOME
0 $ 0 $
30-Jun-13 NZ$
Parent 30-Jun-14 30-Jun-13 NZ$ NZ$
7,969,277 72,490 2,248,892 215,934 14,642 119,251 10,640,486
6,447,750 136,537 1,172,093 16,876 7,773,256
1,000,000 1 20,000 1,020,001
3,546,918 1,099,229 1,776,693 84,000 92,131 111,260 19,242 846,724 612,397 1,156,022 9,344,615 1,295,870
3,327,934 1,398,274 1,573,053 90,833 119,733 94,862 89,790
197,466 92,131 538,977 828,574 191,427
156,296 94,862 779,822 1,030,980 (497,734)
572,439 457,501 7,724,416 48,840
530,000 3,246 533,246
93,176 (135,029) (41,852) 1,254,018
101,057 (89,515) 11,542 60,382
439,667 439,667 631,095
294,604 294,604 (203,130)
286,321 21,384 307,705 1,561,722
456,094 411,931 (48,752) 819,273 879,655
286,321 286,321 917,416
456,094 (48,752) 407,342 204,212
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
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Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Statement of Changes in Equity
Notes
Group 30-Jun-14 NZ$
EQUITY AT START OF PERIOD COMPREHENSIVE INCOME Add Surplus/(Deficit) For The Year OTHER COMPREHENSIVE INCOME Change in Fair Value of Equities Gain/(Loss) Foreign exchange gain/(loss) (Surplus)/Deficit Transferred to Minority Interest TOTAL OTHER COMPREHENSIVE INCOME TOTAL COMPREHENSIVE INCOME Minority Interest Shareholding Minority Interest share of Surplus/(Deficit) EQUITY AT END OF PERIOD
6
$
15 $
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
24,639,029
23,779,305
9,930,169
1,254,018
60,382
631,095
(203,132)
456,094 (48,752) 411,931
286,321 -
456,094 (48,752) -
819,273 879,655
286,321 917,416
407,342 204,212
10,847,580
9,930,169
286,321 21,383 307,705 1,561,723 (21,383) 26,179,368
392,000 (411,931) 24,639,029
9,725,958
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
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Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Statement of Financial Position Notes
Group 30-Jun-14 NZ$
CURRENT ASSETS Cash and Cash Equivalents Pitt Island Barge Project Trade & Other Receivables Inventory Loans to Trading Companies Other Financial Assets
12 9 6 3 21 14 8 5
TOTAL CURRENT ASSETS NON CURRENT ASSETS Other Financial Assets Shares in Trading Companies Intangible Assets Forestry Assets Pitt Island Wharf Project Loans to Trading Companies Property, Plant & Equipment TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and Other Payables Income in Advance Term Loans Loans from Trading Companies Employee Entitlements TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Term Loans TOTAL NON CURRENT LIABILITIES NET ASSETS TRUST EQUITY Retained earnings Minority Interest Other Reserves Equity Carried Forward
8 5 15 7 4 20 14 9 6
10 7 13 18 14 22
18
15 $
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
5,802,361 984,402 669,967 531,823
1,157,562 660,547 1,140,891 772,946 258,267
812,790 6,626 6,414,139 174,673
958,712 26,983 5,347,414 168,426
7,988,554
3,990,213
7,408,228
6,501,535
5,204,112 9,968,947 597,688 2,219,338 7,288,601 25,278,686 33,267,240
5,088,609 8,396,117 381,754 8,879,186 22,745,665 26,735,878
5,178,035 408,602 350,000 5,936,637 13,344,865
5,058,911 408,602 250,000 5,717,513 12,219,048
725,182 2,792,832 1,415,587 41,643 4,975,244
433,934 363,482 216,902 32,169 1,046,487
11,351 2,485,934 2,497,285
11,749 2,277,126 2,288,875
2,112,627 2,112,627 26,179,368
1,050,365 1,050,365 24,639,029
10,847,580
9,930,169
11,186,782 (41,315) 15,033,901 26,179,368
9,911,380 (19,931) 14,747,580 24,639,029
1,825,272 9,022,308 10,847,580
1,194,179 8,735,987 9,930,169
________________
___________________
Trustee
Trustee
Dated: 1 September 2014
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 17
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Statement of Cash Flows
Group 30-Jun-14 NZ$ CASH FLOWS FROM OPERATING ACTIVITIES Cash was provided from: Receipts from customers Grant Income Sundry Income Interest Income Cash was applied to: Payments to Suppliers Payments to Employees Directors and Trustees Fees Interest Paid Net Cash Outflow from Operating Activities
(Note 11)
CASH FLOWS FROM INVESTING ACTIVITIES Cash was provided from: Sale of Fixed Assets Sale of Fish Quota Investment Withdrawal Repayment of Chatham Auto & Marine Loan Repayment of Chatham Island Council Loan Repayment of South Coast Line Extension Repayment of Air Chathams Loan
Cash was applied to: Pitt Island Barge Purchase of Fixed Assets Purchase of Fish Quota Investment Contribution Pitt Island Wharf Construction Chatham Auto & Marine Loan Purchase of Shares Goodwill from 44 South purchase Net Cash Outflow from Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Cash was provided from: Shares Issued Minority Interest Advances from Term Loans
Cash was applied to: Repayment of Term Loans Net Cash Inflow/ (Outflow) from Financing Activities Net (Decrease)/ Increase in Cash Held Add Cash at Start of Year Balance at End of Year
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
8,105,591 4,678,241 72,490 86,888 12,943,210
5,970,763 136,537 105,434 6,212,735
20,000 1 94,797 114,799
3,246 71,981 75,227
5,761,894 626,704 195,260 142,651 6,726,509 6,216,700
5,671,698 413,898 179,078 89,515 6,354,188 (141,454)
252,785 252,785 (137,986)
257,947 257,947 (182,720)
120,000 987,000 25,460 31,074 18,000 77,606 1,259,139
3,719,430 4,578,104 8,072 20,560 18,000 116,408 8,460,573
25,460 31,074 77,606 134,140
4,578,103 8,072 20,560 116,408 4,723,144
186,176 458,578 2,561,445 1,885,787 5,091,986 (3,832,847)
660,547 3,218,848 1,309,368 3,170,404 145,000 400,000 8,904,167 (443,594)
134,140
3,170,404 145,000 409,000 3,724,404 998,740
2,532,000 2,532,000
392,000 1,260,000 1,652,000
271,053 2,260,947 4,644,800 1,157,562 5,802,361
322,055 1,329,945 744,898 412,663 1,157,562
-
142,078 (142,078) (145,924) 958,712 812,789
-
169,869 (169,869) 646,150 312,560 958,712
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 18
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
1.
Reporting Entity
Chatham Islands Enterprise Trust (the “Trust”) is a Charitable Trust which was established 1 December 1991 to take over the ownership and administration of essential services (airport, electricity, port and local abattoir) which were previously provided by Government Departments. The Trust operates for the benefit of current and future inhabitants of the Chatham Islands. The primary objective of the Trust is to provide goods or services for the community or social benefit of the Chatham Islands. The Trust is not established for the purpose of providing financial return to equity holders. Accordingly, the Trust has designated itself and the group as public benefit entities for the purposes of New Zealand equivalents to International Financial Reporting Standards. The Trust group consists of eight subsidiary companies which are wholly owned by the Trust and are registered under the Companies Act 1993. The subsidiary companies are: Chatham Islands Management Limited, Chatham Islands Airport Limited, Chatham Islands Electricity Limited, Chatham Islands Ports Limited, Chatham Islands Quota Holdings Limited, Chatham Islands Asset Holdings, CIAH (Cook Islands) Limited and Chatham Islands Shipping Limited which is 51% owned by the Trust. The Trust conducts all operations from New Zealand. The shipping company undertakes activities in the Pacific Islands. 2.
Basis of Preparation
Statement of compliance The financial statements 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 (NZIFRS) and other applicable financial reporting standards as appropriate for public benefit entities. All accounting policies set out below have been consistently applied to all periods presented in these financial statements. The financial statements were approved by Latoya Hough (Trustee) and Ian Maxwell (Trustee) on behalf of Trustees on 1 September 2014. Basis of measurement The financial statements have been prepared on the historical cost basis, modified by the revaluation of biological assets and financial instruments. Functional and presentation currency These financial statements are presented in New Zealand dollars ($), which is the Trust’s functional currency. Use of estimates and judgements The preparation of financial statements 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. The estimates and the associated assumptions are based on historical experience and various other factors that are believed reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 19
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies of most significant effect on the amount recognised in the financial statements are described in the following notes:
Note 4 – Intangible assets
Note 5 – Other financial assets
Note 13 – Revenue in advance
Note 17 – Valuation of forestry assets
Note 9 – Valuation of fixed assets
Judgement has also been exercised in preparing these financial statements in relation to the following:
Calculating provisions for doubtful debts.
Calculating provisions for employee benefits.
Calculating general accruals.
Determining useful life of assets for accounting depreciation.
Assessing the fair value to assess whether assets are impaired.
Capitalisation of intangible assets.
Determining the quantum and recognition of revenue in advance.
Determining impairment of selected assets
3.
Significant accounting policies
a. Consolidated financial statements Consolidated financial statements for the Trust and trading companies have been accounted for using the purchase method. Corresponding assets, liabilities, equity, revenues and expenses are added on a line by line basis. All intra group balances, transactions and income and expenses are eliminated on consolidation. Investments in subsidiaries are carried at cost in the Trust parent entity financial statements. Subsidiaries Subsidiaries are entities that are controlled, either directly or indirectly, by the Group. Control exists when the Group has the power, directly or indirectly to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination shall be measured at fair value, which shall be calculated as the total of the acquisition date fair values of the assets transferred by the Group, the liabilities incurred by the Group to former owners, the equity issued by the Group and the amount of any non-controlling interest in the acquiree either at fair value or at the proportional share of the acquiree’s identifiable net assets. Acquisition related costs are expensed as incurred and included in other gains/ (losses) net. All material transactions between subsidiaries or between the Parent Company and subsidiaries are eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies of the group.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 20
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
b. Property, plant and equipment The Trust took over the assets of the Chatham Islands Meat Works, Airport, Electricity Supply and Waitangi and Flower Pot Port Facilities on 1 December 1991, at a nominal price of $1 each. These assets were then revalued to fair value in 1992/93. Assets other than land and buildings have not been subsequently revalued. Land and buildings were revalued in 1996/97 and this has been deemed to be opening cost going forward under NZ IFRS. Land and Buildings, plant and equipment, and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. Depreciation is provided on a straight line basis on all fixed assets, other than freehold land and airport land preparation costs, at rates which will write off the cost of the assets, less their estimated residual values, over their useful lives. The estimated useful lives of major classes of assets are: Airport Runway and Paved Areas
20 years
Buildings and Timber Structures
20 to 40 years
Electricity Reticulation Line
40 years
Fixtures & Fittings
5 to 10 years
Generators
5 to 10 years
Motor Vehicles
5 years
Office Equipment
5 years
Plant
10 years
Shipping Vessels
3 to 15 years
The assets’ residual values and useful lives are reviewed, and adjusted where appropriate, at each balance date. An asset’s carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount. c. Statement of cash flows The statement of cash flows has been prepared using the direct method. Definitions are: 1) Operating Activities All transactions and other events that are related to the operation of the Trust and includes interest expense on funds borrowed. 2) Investing Activities All transactions relating to the acquisition and disposal of long term assets and other investments not included in cash equivalents.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 21
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
3) Financing Activities The change in equity and debt capital structure of the reporting entity and the cost of servicing the equity capital. 4) Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with banks, investments in term deposits with maturities of less than 3 months, bank overdrafts and other highly liquid investments that are readily convertible to known amounts of cash as part of its day to day cash management and which are subject to an insignificant risk of changes in value. d. Accounting for income taxes The Chatham Islands Enterprise Trust is registered as a Charitable Trust under the Charities Act 2005. The Trust has obtained exemptions from income tax from the Inland Revenue Department (IRD). During the 1997/98 financial year, the trading companies received an exemption from income tax from the IRD on the basis that the trading companies are all wholly owned subsidiaries of a Charitable Trust. Chatham Islands Shipping Limited is only 51% owed by the Trust and the surplus or deficit generated is subject to income tax. CIAH (Cook Islands) Limited owns the Southern Tiare and the trading surplus/deficit is subject to New Zealand income tax rules as this company does not qualify for charitable status. e. Income and expense recognition Charter revenue is charged on a per hour hire basis. Revenue is recognised on a pro-rata basis in accordance with the number of hours of the hire that are complete. All other revenue is recognised when goods or services are delivered. Chatham Islands Enterprise Trust receives government grants from Trade and Enterprise and the Sustainable Farming Fund. These grants subsidise costs relating to project investigations and also are a conduit for funding development projects on the island. Grants are also received for capital projects and are recognised to the extent that the related expenditure has been committed and approved by the Department of Internal Affairs. The grants are recognised as revenue upon entitlement as conditions pertaining to the relevant grant or associated elligible expenditure have been fulfilled. Interest income for investments other than those in managed funds is recognised using the effective interest method. Operating expenses are recognised in the surplus or deficit upon utilisation of services or at the date of origin. Grant expenditure includes discretionary grants. These are grants that the Trust has no obligation to award on receipt of the grant application and are recognised as expenditure when a successful applicant has been notified of the Trust’s decision. Grants also include donations made from the Trust Parent to a subsidiary in order to achieve outcomes as prescribed under the trust deed. f. Equity The components of equity include share capital, retained earnings and reserves. Retained earnings include all current and prior period results. g. Contingent assets and liabilities Probable inflows of economic benefits that do not meet the recognition criteria of an asset are considered contingent assets until earned. Probable outflows of economic loss that do not meet the recognition criteria of an liability are considered contingent liabilities until realised. The contingent assets and liabilities are described in note 16.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 22
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
h. Goods and services tax The Trust is not registered for GST. Each of the subsidiary companies are registered for GST and the financial statements (excluding trust transactions) have been prepared on a GST exclusive basis except for debtors and creditors, which are presented on a GST inclusive basis. The balances of GST refunds or payments due are included in the Statement of Financial Position. The net GST paid to, or received from the Inland Revenue, including the GST relating to investing and financing activities is classified as an operating cash flow in the Statement of Cash Flows. i. Trade and other receivables Trade receivables are projected to be due within 30 days and do not bear any effective interest rate. All trade receivables are subject to credit risk exposure. Trade receivables are measured at market value less any provision for impairment. j. Financial assets and liabilities The Trust’s financial liabilities include overdrafts, and trade and other payables. These are included in the Statement of Financial Position line items “bank overdraft” and “trade and other payables”. Trade payables are recognised at their carrying amount. The Trust’s financial assets includes cash and cash equivalents, debtors and other receivables, loans and investments with Bradley Nuttall. Financial assets and liabilities are initially measured at fair value plus transaction costs unless they are carried at fair value through the surplus or deficit in which case the transaction costs are recognised in the income statement. Any impairment of financial assets by comparing fair value to carrying value is taken through the surplus or deficit. The Trust classifies its financial assets into the following categories, fair value through surplus or deficit and loans and receivables. Loans and receivables include loans to South Coast Line residents, the Chatham Islands Council, Air Chathams, Chatham Automotive and Marine, a financial asset to DMK Shipping Limited and related parties loan and receivables. After initial recognition they are measured at amortised cost using the effective interest method. Fair value through surplus or deficit financial assets include the Trust’s interest earning investments with Bradley Nuttal and equity investments with Bradley Nuttal. The returns from the investments have been recognised in the surplus or deficit of the Chatham Islands Enterprise Trust, the consolidated surplus or deficit and as cash flows from operating activities in the Consolidated Statement of Cash Flows. k. Impairment of property, plant and equipment and intangible assets At each reporting date, the Chatham Island Enterprise Trust reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amounts of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is assessed by comparing to book value the fair value less costs to sell or the value in use. Recoverable amount is the higher of fair value less costs to sell, and value in use. Value in use looks at cash flows for cash generating assets and for Public Benefit Entities the depreciated replacement cost. Depreciated replacement cost is applicable for airport, port, electricity and other infrastructural assets on the basis that these assets have future economic benefits that are not primarily dependent on the assets’ ability to generate net cash inflows, and if deprived of the asset, the Trust would replace the asset in order to retain its future economic benefits or service potential.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 23
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the surplus or deficit immediately l. Inventories Inventories are valued at the lower of cost, determined on a First In First Out basis, and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less applicable selling expenses. m. Intangible assets Under NZ IFRS fish quotas are classified as an intangible asset with an indefinite life and are required to be tested annually for impairment. Impairment occurs when the book value of an asset exceeds its recoverable amount. Where an asset is considered to be impaired the book value of the asset must be written down to the impaired value through the surplus or deficit. Under NZ IFRS quota has been valued at original cost or if it has been granted by the crown, fair value at the time the species was allocated to the Trust. Resource consent costs relating to a wind power project have been treated as an intangible asset. The resource consent had been granted as at 30 June 2010. The consent costs will be tested annually for impairment or whenever there is an indication that the asset may be impaired. Impairment occurs when the book value of an asset exceeds its recoverable amount. Chatham Islands Asset Holdings Limited entered the New Zealand Emissions Trading Scheme (“ETS”) in respect of 52.4 hectares of forest land located on the Chatham Islands (the “specified area”). The company owns 2,278 emission trading scheme units which are recorded at market value. n. Biological assets Biological assets are stated at fair value less estimated point-of-sale costs, with any resultant gain or loss recognised in the surplus or deficit where the fair value can be reliably measured. Point of sale costs includes all costs that would be necessary to get assets to market. Trees are valued at fair value based on the present value of market price less costs to point of sale. o. Financial Instruments The Trust is involved with third parties in transactions involving financial instruments. These transactions take place as part of the Trust's normal business. Involvement in financial instruments is limited to term deposits, accounts receivable, accounts payable, loans, and investments as noted in (j). All revenue and expenditure relating to financial instruments is recorded in the income statement. p. Leases On 10 August 2010, Chatham Islands Electricity Ltd entered a Build Own Operate Transfer (“BOOT”) contract with Chatham Islands Wind Limited. This was for the lease of wind turbines for 20 years. After 20 years ownership, the turbines will transfer to Chatham Islands Electricity Limited. The Trust does not have any other finance leases of fixed assets, where substantially all the risks and benefits incidental to the ownership pass to the Trust or operating leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 24
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
q. Employee entitlements Provision has been made in respect of the Trust’s liability for annual and long service leave, at balance date. Employee benefits expected to be settled within 12 months of balance date are deemed to be short term employee entitlements and are measured at nominal values based on accrued entitlements at current rates of pay. A liability and an expense are recognised for bonuses where the Trust has a contractual obligation or where there is a past practice that has created a constructive obligation. The Trust does not accrue sick leave. r. Foreign currency translation Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the surplus or deficit. The results and financial position of foreign share investments that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a)
assets and liabilities for each statement of financial position are translated at the closing rate at the date of that statement of financial position; and
(b)
all resulting exchange differences are recognised in other comprehensive income.
s. Changes in accounting policies The following new standards, interpretations and amendments have been applied to the Chatham Island Enterprise Trust financial statements during the financial year, which have had only a presentational or disclosure effect:
NZ IAS 18 – Revenue
Other the changes noted above, there has been no other changes in accounting policies.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 25
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
4.
Total revenue Group 30-Jun-14 NZ$
Trading revenue Dividend Income Sundry income Fair Value Movement in Forestry Assets Gain on sale of Forestry Assets South Coast Lines Adjustment to Fair Value Grant income Gain/(Loss) on Sale of Fixed Assets Total revenue
5.
Parent 30-Jun-13 NZ$
7,969,277 72,490 215,934 14,642 2,248,892 88,001 10,609,236
6,447,750 136,537 1,172,093 16,876 7,773,256
30-Jun-14 NZ$
30-Jun-13 NZ$
1,000,000 1 20,000 1,020,001
530,000 3,246 533,246
Administration expenses Group 30-Jun-14 NZ$
Audit fees - Electricity, Management and Shipping Audit fees - Group Allocation Accounting fees Consultancy fees Economic development Insurance Rates Salaries and wages Shipping Expenses Telecommunications Sundry/Administration fees Total administration expenses
Salaries and wages Annual leave provision Provision for bonuses Total employee benefits
Parent 30-Jun-13 NZ$
18,470 53,530 89,434 116,445 63,545 176,447 19,828 634,704 28,879 27,328 548,082 1,776,693
24,780 55,395 84,201 58,331 196,518 132,777 18,901 446,068 49,853 23,243 482,985 1,573,053
593,060 17,563 24,080 634,703
413,899 32,169 446,068
30-Jun-14 NZ$
30-Jun-13 NZ$
197,466 197,466
156,296 156,296
-
-
Audit fees are charged through Chatham Islands Management Limited and therefore do not appear in the parent entity. 6.
Trade and other receivables Group
For the year to
Trade receivables Less provision for impairment of receivables Net trade and other receivables
30-Jun-14 NZ$ 1,029,212 (44,810) 984,402
Parent 30-Jun-13 NZ$ 1,166,855 (25,964) 1,140,891
30-Jun-14 NZ$ 6,626 6,626
30-Jun-13 NZ$ 26,983 26,983
There is a concentration of credit risk in relation to trade receivables in that the Trust has the majority of its customers based on the Chatham Islands.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 26
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
The movement in provision for impairment of trade receivables is as follows: Opening provision for impairment trade receivables Less bad debts recovered Add current year movement in provision Closing provision for impaired trade receivables
25,965 (70) 26,035 18,775
39,624 39,624 (13,659)
-
-
44,810
25,965
-
-
Certain accounts receivable have been identified as potentially being non collectible. The provision provides for potential impairment without writing these receivables off as bad debts whilst collection efforts continue.
7.
Intangible Assets
Quota Held In 1992, Wet fish Quota was allocated to the Trust Group from the Crown with the agreement of Chatham Island fishermen. The current policy is the original quota allocated is to be held in perpetuity by the Trust Group for the benefit of Chatham based fishermen. Certain restrictions exist in relation to original quota granted by the NZ government to the Trust. The original deed of transfer for wet fish (1,202.4 Tonne) is able to be traded for a better mix of species at market values that better reflects the fin fisheries in the Chatham Islands waters whilst promoting the interest of current and future inhabitants of the Chatham Islands. The security of 3500 quota shares of CRA fished in Area 6 and 18,476,597 quota shares of BCO4 fished in Area 4 has been used as security for borrowing from BNZ. All other quota acquired or purchased has no caveats or encumbrances and can be freely traded.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 27
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
The species mix is as follows: Species
Anchovy Barracouta Bladder Kelp Blue Cod Blue Moki Bluenose Butterfish Deepwater Red Crab Deepwater Tuatua Fine Dosinia Frilled Venus Shell Frost Fish Garfish Gurnard Hapuka/Bass Horse Mussel Kahawai King Crab Kina (Sea Urchin) Kingfish Large Trough Shell (MDI) Large Trough Shell (MMI) Leather Jacket Ling Paddle Crab Pilchard Red Cod Ribaldo Ringed Dosinia School Shark Sea Cucumber Sea Perch Spiny Dogfish Sprat Stargazer Tarakihi Triangle Shell Trumpeter White Warehou Crayfish Knobbed Whelk Eel Oyster Deepwater King Clam Prawn Killer
Area
4 4 4 4 4 3 4 4 4 4 4 4 4 3 4 4 4 4 4 4 4 4 4 4 4 4 3 4 4 4 4 4 4 4 4 4 4 4 4 4 4 17 4 4 4
Tonnage (Original Allocation) (Ex Crown) 158.000 49.500 172.800 300.000 136.300 300.000 85.800 -
Tonnage 30/06/2014 8.000 43.332 193.240 418.800 2.500 0.259 5.070 3.200 0.800 0.800 0.800 21.997 1.600 89.827 202.700 0.800 7.200 8.000 17.495 0.740 0.800 0.800 5.567 303.017 18.707 8.000 0.074 83.064 0.800 148.300 1.600 307.129 774.516 8.000 300.000 90.335 0.800 35.800 16.010 32.108 4.800 0.021 34.800 0.960 0.800
Tonnage 30/06/2013
Tonnage (Ex Crown)
8.000 43.332 193.240 389.500 5.070 3.200 0.800 0.800 0.800 21.997 1.600 89.827 197.600 0.800 7.200 8.000 0.740 0.800 0.800 5.567 303.017 18.707 8.000 83.064 0.800 145.500 1.600 307.129 774.470 8.000 300.000 89.735 0.800 35.782 16.010 32.103 4.800 0.021 12.000 0.960 0.800
Quota has been valued at cost. Under NZIAS 38, fish quota is classified as an intangible asset with an indefinite life and is tested annually for impairment or whenever there is an indication that the asset may be impaired. Impairment occurs when the book value of an asset exceeds its recoverable amount. Individual fish species are considered for impairment. Where an asset is considered to be impaired, the book value of the asset is written down to the impaired value through the income statement.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 28
8.000 193.240 158.000 5.070 3.200 0.800 0.800 0.800 3.928 1.600 49.500 172.800 0.800 8.000 8.000 0.740 0.800 0.800 5.567 300.000 18.707 8.000 83.064 0.800 136.300 1.600 179.890 774.541 8.000 300.000 85.800 0.800 23.876 10.673 32.103 4.800 0.021 12.000 0.740 0.800
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
30-Jun-14 NZ$ Wetfish Quota Opening book value at cost Add Purchase of Quota Less Sales of Quota Closing net book value CRA6 Quota CRA6 Quota opening cost Add Purchase of Quota Closing net book value Other Quota Other Quota opening cost Add Purchase of Quota Closing net book value Total closing book value
5,759,785 2,466,922 (1,001,723)
7,224,983 2,453,976 1,500
2,455,476
-
107,746 107,746 9,788,205
30-Jun-13 NZ$ 4,450,417 1,309,368 -
5,759,785 2,453,976 -
2,453,976
-
8,213,761
Impairment Test for Quota Fish quota is considered to have an indefinite useful life. Based on an analysis of all the relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity or economic benefits to the community. The carrying value of the fish quota in the Statement of Financial Position has been reviewed as at 30 June 2014. The directors consider that the carrying value of quota (at cost) is not impaired. In assessing the value of the quota for financial reporting purposes, the directors of Chatham Islands Quota Holdings Limited took the following issues into consideration when undertaking the review of quota values as at 30 June 2014: - An appraisal by Donal Boyle of Quota Management Systems Limited as at 30 June 2014. This appraisal reflects the limited returns available from wet fish species due to low Chatham’s port prices. - Some of the quota held by the Trust is owned in accordance with a trust deed and is only able to be traded to secure a better species mix. - If, in the unlikely event that the existing quota was placed in the market for sale, there would be a limited number of buyers for some inshore species. - Chatham’s operational costs are higher than mainland New Zealand costs and therefore, port prices are lower. This is recognised by Ministry of Fisheries in setting deemed values which are essentially a financial penalty for over-fishing. Chatham’s deemed values are on average 70% of mainland values. - There has been no indication that the cost of the quota may be impaired. The trust, after relying on the appraisal of market prices less costs to sell, determined that there was no impairment of quota shares as at 30 June 2014. Wind Resource Consents Resource consent costs relate to a wind power project, which has been recognised as an intangible asset. The resource consent was granted on 9 November 2009. Amortisation of the intangible asset commenced in July 2010 based on 20 years, which represents the term of the boot contract with the turbine supplier.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 29
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
The consent costs are tested annually for impairment or whenever there is an indication that the asset may be impaired. Impairment occurs when the book value of an asset exceeds its recoverable amount.
For the year to
30-Jun-14 NZ$
Opening Balance Amortisation Total
182,356 (10,726) 171,630
30-Jun-13 NZ$ 193,083 (10,727) 182,356
New Zealand Units (Emissions Trading Scheme) In 2013, Chatham Islands Forestry (now Chatham Islands Asset Holdings Limited) sold the Mahia forest, with it the ETS units were reallocated to the purchaser. The company received ETS units of 2,278 during the 2014 year from its Chatham Islands forestry block. These units are stated at market value. For the year to
30-Jun-14 NZ$
30-Jun-13 NZ$
Units Forestry Opening Balance Additions Disposals
Total
Units
2,278 2,278
9,112 9,112
38,608 (38,608) -
2,278
9,112
-
262,534 (262,534) -
Goodwill The Trust purchased a freight shipping business from 44 South Shipping Limited on 2 July 2012. The transaction resulted in a payment of goodwill above the asset values of the business of $400,000. At 30 June 2013, the goodwill was deemed to be impaired and was written off.
Total Intangible Assets
For the year to
Emission trading units Wind Resource Consents Fish Quota Total
30-Jun-14 NZ$ 9,112 171,630 9,788,205 9,968,947
30-Jun-13 NZ$ 182,356 8,213,761 8,396,117
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 30
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
8.
Other financial assets Group 30-Jun-14 NZ$
Chatham Islands Council - Loan Chatham Islands Council - Warm homes project Chatham Islands Council - NKMR South Coast Line Extension Air Chathams - Loan Baldur Charter Lease Chathams Automotive & Marine - Loan Bradley Nuttall Investments Total Other Financial Assets
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
162,302 154,105 9,764 16,179 520,478 273,399 111,468 4,488,240 5,735,935
173,595 169,962 13,688 19,538 604,436 136,928 4,228,730 5,346,876
162,302 154,105 9,764 426,830 111,468 4,488,240 5,352,709
173,595 169,962 13,688 504,436 136,928 4,228,730 5,227,339
9,834 16,822 4,173 15,104 185,055 273,399 27,436 531,823
8,948 13,686 3,924 14,841 191,408 25,460 258,267
9,834 16,822 4,173 116,408 27,436 174,673
8,948 13,686 3,924 116,408 25,460 168,426
152,468 137,283 5,591 1,075 335,423 84,032 4,488,240 5,204,112
164,647 156,276 9,764 4,697 413,027 111,468 4,228,730 5,088,609
152,468 137,283 5,591 310,422 84,032 4,488,240 5,178,035
164,647 156,276 9,764 388,027 111,468 4,228,730 5,058,911
5,735,935
5,346,876
5,352,708
5,227,338
Split Current portion Chatham Islands Council - Loan Chatham Islands Council - Warm homes project Chatham Islands Council - NKMR South Coast Line Extension Air Chathams - Loan Baldur Charter Lease Chathams Automotive & Marine - Loan
Term portion Chatham Islands Council - Loan Chatham Islands Council - Warm homes project Chatham Islands Council - NKMR South Coast Line Extension Air Chathams - Loan Chathams Automotive & Marine - Loan Bradley Nuttall Investments
Total Other Financial Assets
Bradley Nuttall equities investment represents a portfolio of fixed interest investments and Trans-Tasman listed public company shares. The portfolio is marked to market and is at market value. This investment fund has increased by 6.13% for the year ended 30 June 2014 (30 June 2013: 8.10% increase) In June 2005, the Chatham Islands Enterprise Trust provided a loan of $220,000 to Chatham Islands Council. The loan is classified as loans and receivables. In October 2011 the loan was refinanced at a rate of 7.92% (2013: 7.92%) for a term of 4 years after which the Council will refinance the loan. The carrying amount is deemed to be not materially different from market value. In April 2011, Chatham Islands Enterprise Trust provided a loan of $100,000 to Chatham Islands Council. The loan is classified as loans and receivables with an interest rate of 6.00% (2013: 6.00%) for a term of 5 years after which the Council will refinance the loan. On 29 June 2012 a further $80,000 was advanced to the Chathams Islands Council. The carrying amount at balance date is deemed to be not materially different from market value. In September 2011, Chatham Islands Enterprise Trust provided a loan of $20,000 to Chatham Islands Council. The loan is classified as loans and receivables with an interest rate of 6.20% for a term of 5 years after which the Council will refinance the loan. The carrying amount at balance date is deemed to be not materially different from market value.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 31
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
In June 2012, Chatham Islands Enterprise Trust provided a loan of $620,844 to Air Chathams Limited. The loan is classified as loans and receivables with an interest rate of 9.75% for a term of 4 years after which Air Chathams will refinance the loan. The carrying amount at balance date is deemed to be not materially different from market value. On 1 April 2014 the Trust provided a six month repayment holiday to Air Chathams Limited. The term of the loan has been extended by a further year. In 1 February 2013, Chatham Islands Enterprise Trust provided a loan of $145,000 to Chathams Automotive & Marine. The loan is classified as loans and receivables with an interest rate of 7.50% for a term of 2 years. The carrying amount at balance date is deemed to be not materially different from market value. The carrying value of the investments and loans represent the maximum credit exposure to the Trust. Fair Value Adjustment Write-up In November 2005, Chatham Islands Electricity completed the South Coast line extension. The 12 residents were lent $306,900 to be repaid over 20 years at a rate of 0.3763% per annum. A fair value assessment is required by NZIAS 39. Given the low coupon rate, the fair value of the loans is deemed to be $16,179 (2013: $19,538), the fair value adjustment of $14,642 (2013: $16,876) has been recorded in the statement of comprehensive income. Fair Value Adjustment Write-down In March 2012, Chatham Islands Enterprise Trust provided a loan of $100,000 to Air Chathams Limited. The loan is classified as loans and receivables with an interest rate of 3.00% for a term of 2 years. In April 2014, this loan was extended for a further 15 months. On 1 April 2014 the Trust provided a six month principal repayment holiday. Given the low coupon rate, a fair value adjustment required by NZIAS 39 of $6,353 (2013: $0) has been made as follows:
For the year to Opening Balance Plus: Fair Value Adjustment Closing Balance
30-Jun-14 100,000 (6,353) 93,647
30-Jun-13 100,000 100,000
In March 2014, a charter agreement and sale agreement was entered into for the sale of the MV Baldur. Under NZIAS 17, the agreements meet the definition of a finance lease. The minimum lease payments have been discounted at balance date at a rate of 7.2% and a fair value adjustment of $12,889 has been made (2013: $0). The remaining lease receivable for 2015 is $280,000 (2013: $0). The net present value of the receivable at 30 June 2014 is $273,399 (2013: $0). The combined fair value write-downs of $19,242 have been recorded in the statement of comprehensive income.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 32
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
9. Property, plant and equipment Fixed assets for the various companies are made up as follows: 9.1
Chatham Islands Management Limited
Description of Asset
Land and Buildings House Land - Factory Site Accommodation Meatworks Buildings Office Upgrade Vacant Section - (Lot 5)
Valuation (or Cost)
Opening Additions BookValue (Disposals)
Depn Rate
Depn Method
20,133 -
2.5% 0.0% 2.5% 2.5% 10% 0%
SL SL
160,171 15,000 134,981 98,349 5,000
77,025 15,000 127,909 5,000
Fixtures and Fittings Cafe Fixtures and Fittings Office Furniture Zip Water Heater
1,318 29,084 1,456
9,895 1,128
-
Office Equipment Brother Plain Paper Fax Canon Photocopier GP215 Computer Equipment Computer Software Digital Camera Digital Projector (X50) Minolta Photocopier Office Security/Fire System PABX Communication System Server and Network Broadband Connection
1,575 6,500 63,284 13,830 987 3,878 8,388 3,752 10,954 10,142 3,192
201 2,012 2,251 1,100 -
Motor Vehicles Motor Vehicle-Toyota Corona Motor Vehicle-Toyota Prado Motor Vehicle-Toyota Hilux DSQ670
18,476 16,802
693 537 1,499 1,997
Other Lawn Mower Vacuum Cleaner Eftpos Machine Radio Equipment Fuel Gauge Unit and Pumping System Chatham Fuels Land Chatham Fuels Building Motor Vehicle - Nissan Condor Fuel Tanker Mini Fuel Tanker VHF Radio Fuel Truck Fuel Bowsers Ranchslider - Fuel Building Totals
9,246 57,051 215,723 32,000 4,150 1,279 4,500 104,765 1,028 1,041,588
Depn Value
Accumulated Depreciation
Valuation (or Cost)
SL SL SL
5,169 3,125 -
68,182 10,197 98,349 -
91,989 15,000 124,784 5,000
20% 20% 14%
SL SL SL
2,449 197
1,318 21,637 525
7,447 931
2,938 -
20% 20% 20% 33% 20% 20% 20% 10% 10% 20% 20%
SL SL SL SL SL SL SL SL SL SL SL
100 1,471 1,095 880 -
1,475 6,500 59,805 13,830 987 3,878 8,388 3,752 9,799 9,922 3,192
100 3,479 1,155 220 -
9,238 15,526
-
10% 10% 10%
SL SL SL
1,848 1,680
11,085 2,957
7,390 13,844
-
-
48% 80% 40% 10%
SL SL SL SL
-
693 537 1,499 1,997
-
23,071
11% 0.0% 2.5% 10% 10% 10% 10% 11% 7%
SL SL SL SL SL SL SL SL SL
971 5,393 3,200 415 128 450 11,103 72 39,745
5,929 57,051 182,332 20,267 2,628 927 2,663 69,316 910 608,307
SL
4,288 38,784 14,933 1,937 480 2,288 46,551 189 449,954
4,958 57,051 176,939 17,067 2,213 799 2,213 58,213 838 591,632
The total rateable value of land and buildings owned by Chatham Islands Management Limited as at 30 June 2014 was $727,000 (30 June 2013: $727,000).
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 33
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
9.2
Chatham Islands Airport Limited
Description of Asset
Valuation (or Cost)
Apron Lighting System Cleaning Equipment Electricity Reticulation System Fencing Fixtures&Fittings Generator No.1 Generator No.2 Land Land Preparation Passenger Terminal Building Pay Phone Radio Equipment Rescue Fire Building Runway and Paved Areas Runway Brooms Water Reticulation System Lighting - Apron Area Coffee Machine NDB Shed Landing Lights Security Camera System Fire Alarm System and Emergency Lighting NDB Transmitter Totals
Opening Additions BookValue (Disposals)
9,931 567 3,004 68,394 59,111 12,224 3,556 40,000 900,000 388,415 650 4,501 84,311 900,000 10,062 20,000 5,209 2,500 24,907 87,335 7,431 8,421 18,463
0 0 0 57,033 0 0 0 40,000 900,000 270,859 0 534 40,846 315,000 0 13,500 1,591 1,208 23,879 75,691 3,613 8,210 16,616
0 0 0 0 0 0 0 0 0 16,561 0 0 0 0 0 0 0 0 0 0 2,962 0 0
2,658,993
1,768,581
19,523
Depn Depn Accumulated Method Value Depreciation
Rate 10.0% 20.0% 10.0% 2.5% 20.0% 10.0% 20.0% 0.0% 0.0% 2.5% 10.0% 10.0% 2.5% 5.0% 10.0% 2.5% 10.0% 20.0% 2.5% 10.0% 10.0% 10.0% 10.0%
SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL
Closing BookValue
0 0 0 1,696 0 0 0 0 0 7,484 0 53 2,108 45,000 0 500 521 500 623 8,734 669 821 1,846
9,931 567 3,004 13,056 59,111 12,224 3,556 0 0 108,479 650 4,021 45,573 630,000 10,062 7,000 4,139 1,792 1,651 20,378 1,526 1,032 3,693
0 0 0 55,338 0 0 0 40,000 900,000 469,936 0 481 38,738 270,000 0 13,000 1,070 708 23,256 66,957 5,905 7,389 14,770
70,554
941,444
1,717,549
The total rateable value of land and buildings owned by Chatham Islands Airport Limited as at 30 June 2014 was $3,705,500 (30 June 2013: $3,705,500). 9.3
Chatham Islands Asset Holdings Limited
Description of Asset Shipping Assets Ship Baldur Second Hand Containers Second Hand Forklift 1999 Isuzu Truck/Crane Second Hand Forklift 20ft Office Unit Forrestry Assets Computer Software Electric Fence Unit GPS Equipment Planting Equipment Pole Peeler Pruning Equipment Releasing Equipment Residential Subdivision Dev. Scrub Cutter Land - Chathams Totals
Valuation (or Cost)
Opening Additions Gain/ BookValue (Disposals) (Loss) on Sale
500,000 81,000 18,000 148,670 20,000 11,670
375,000 80,663 17,925 148,051 19,917 11,621
647 410 861 1,731 5,540 3,498 528 18,912 1,410 60,000
0 0 0 0 0 0 0 18,912 0 60,000
872,877
732,088
400,000
400,000
118,750
118,750
Depn Rate
Depn Method
Depn Value
Accumulated Closing Depreciation BookValue
25% 10% 10% 10% 10% 5%
SL SL SL SL SL SL
93,750 8,066 1,793 14,805 1,992 581
218,750 8,404 1,868 15,425 2,075 630
0 72,596 16,133 133,245 17,925 11,040
33% 20% 10% 20% 10% 20% 20% 0% 20% 0%
SL SL SL SL SL SL SL SL SL SL
0 0 0 0 0 0 0 0 0 0
647 410 861 1,731 5,540 3,498 528 0 1,410 0
0
120,987
261,775
0 0 0 0 0 0 18,912 0 60,000
329,852
The total rateable value of land and improvements owned by Chatham Islands Asset Holdings Limited as at 30 June 2014 was $384,000 (30 June 2013: $384,000).
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 34
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
9.4
CIAH (Cook Islands) Limited
Description of Asset
Valuation Opening Additions (or Cost) Book Value (Disposals) 2,033,015 2,024,544 239,276
Ship Southern Tiare Totals
2,033,015
2,024,544
Depn Rate
Depn Method 5% SL
239,276
Depn Impairment Accumulated Closing Value Loss Depreciation BookValue 110,624 956,751 119,094 1,196,445 110,624
956,751
119,094
1,196,445
A valuation of the Southern Tiare was completed by Seaboats New Zealand Limited on 31 July 2014. The value of ship was estimated to be US$1,050,000 (NZ$1,196,445). The directors approved the write-down of the carrying value of the Southern Tiare to this value. This resulted in an impairment loss of $956,751 (2013: $0). 9.5
Chatham Islands Electricity Limited
Description of Asset
Valuation (or Cost)
Opening BookValue
Additions
Depn Rate
Depn Method
Depn Value
Accum Depn
Closing BookValue
Powerstation Assets Chainsaw
524
0
20.00%
SL
0
524
0
Control Room
34,791
8,266
4.00%
SL
1,392
27,917
6,874
Cooling Towers
25,000
0
20.00%
SL
0
25,000
0
499
0
10.00%
SL
0
499
0
Fire Alarm System
21,199
0
10.00%
SL
0
21,199
0
Micro Hydro
77,285
0
0.00%
SL
0
77,285
0
Fuel Systems
38,266
0
10.00%
SL
0
38,266
0
7,000
1,399
4.00%
SL
280
5,881
1,119
Generators 1 & 3
228,909
0
20.00%
SL
0
228,909
0
Generator #1
122,964
0
20.00%
SL
0
122,964
0
Generator 2
31,550
0
20.00%
SL
0
31,550
0
Generator 4
28,394
0
20.00%
SL
0
28,394
0
Generator 5
278,945
0
10.00%
SL
0
278,945
0
20.00%
SL
919
919
54,241
Fax Machine
Garage
Generator 6 (Caterpillar 3406TA)
55,160
Voltage Regulators
31,017
13,447
20.00%
SL
6,203
23,774
7,243
Generator Building
57,440
13,673
4.00%
SL
2,298
46,064
11,376
Generator Building #5
47,907
26,429
4.00%
SL
1,916
23,394
24,513
PLC/Control/Cable Upgrade
79,512
0
10.00%
SL
0
79,512
0
Radiator Cooling System
36,714
0
20.00%
SL
0
36,714
0
Water Reticulation
12,209
0
10.00%
SL
0
12,209
0
1,215,284
63,213
13,008
1,109,919
105,365
11.88%
55,160
55,160
Reticulation Assets Airport Power Centre
17,224
9,075
4.00%
SL
689
8,838
8,386
163,361
114,353
5.00%
SL
8,168
57,177
106,185
Cable Locator
5,618
515
10.00%
SL
515
5,618
0
Reticulation Equipment
2,466
69
10.00%
SL
69
2,466
0
1,583,774
1,058,538
2.50%
SL
39,186
537,220
1,046,554
Reticulation Line - SouthC
564,599
452,389
2.50%
SL
14,115
126,325
438,274
Reticulation Line - Owenga
172,278
160,075
2.50%
SL
4,307
16,510
155,768
Line Store
50,800
19,120
4.00%
SL
2,032
33,712
17,088
Line Store-Mezzanine
24,621
24,621
0.00%
SL
0
0
24,621
Test Equipment - Data Logger
1,249
0
17.50%
SL
0
1,249
0
Test Instrument
2,227
0
17.50%
SL
0
2,227
0
Digital Earth Clampmeter
2,850
2,138
20.00%
SL
561
1,274
1,577
17.50%
SL
Recloser
Reticulation Line
Power Pruner 63.62%
1,909
0
2,595,174
1,843,088
27,203
27,203
0
1,909
0
69,642
794,526
1,800,648
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 35
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
9.5
Chatham Islands Electricity Limited (continued)
General Assets Dangerous Goods Bunker
2,000
720
4.00%
SL
80
1,360
Control Panel #5
17,338
0
10.00%
SL
0
17,338
0
House No 1
95,132
55,428
2.50%
SL
2,378
42,082
53,049
House Section (Lot 2)
10,000
10,000
0.00%
SL
0
0
10,000
House No 1 - Fix & Fit
30,206
5,702
20.00%
SL
2,418
26,922
3,284
House No 2 - Fix & Fit
92,151
55,060
20.00%
SL
2,442
39,533
52,618
House Section (Lot 1)
10,000
10,000
0.00%
SL
0
0
10,000
Land - Hydro Project
26,815
0
0.00%
SL
0
0
0
Land - W/Shop
20,000
20,000
0.00%
SL
0
0
20,000
Motor Vehicles
21,730
94,034
3,288
20.00%
SL
3,203
72,305
Printer
1,476
0
20.00%
SL
0
1,476
0
Satelite Phone
2,503
1,007
17.50%
SL
438
1,935
568
Radio Upgrade
10,607
528
10.00%
SL
75
10,153
453
Receipt Printer
3,401
0
40.00%
SL
0
3,401
0
102,334
0
20.00%
SL
691
98,879
3,454
Refridgeration Equipment
2,750
79
10.00%
SL
79
2,750
0
Security System
1,422
0
10.00%
SL
0
1,421
0
Vacant Section (Lot 6)
5,000
5,000
0.00%
SL
0
0
5,000
Scada System
Water Blaster
21,644
640
4,145
951
0
10.00%
SL
0
952
0
Wind Farm Land
53,958
27,092
0.00%
SL
0
26,866
27,092
Workshop Building
89,580
20,733
4.00%
SL
3,583
72,430
17,150
Workshop Fix & Fit
6,127
3,536
10.00%
SL
0
2,957
3,170
Workshop Upgrade
9,354
4,403
4.00%
SL
374
5,325
4,029
Mitsubishi Van EFB535
13,778
0
20.00%
SL
0
13,778
0
Nissan Torrano FJW739
19,353
13,586
20.00%
SL
3,871
9,638
9,715
Nissan Torrano FUS80
19,724
15,122
20.00%
SL
3,945
8,547
11,177
Fencing - Wind Farm
14,947
10,337
10.00%
SL
1,495
6,104
8,843
Shelving Parts room
6,885
5,279
20.00%
SL
1,377
2,984
3,902
761,825
266,898
25,790
26,814
469,137
265,874
4,572,283
2,173,199
108,152
109,464
2,373,582
2,171,887
24.50% Totals
The total rateable value of land and buildings owned by Chatham Islands Electricity Limited as at 30 June 2014 was $1,999,000 (30 June 2013: $1,999,000).
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 36
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
9.6
Chatham Islands Ports Limited
Description of Asset
Valuation Opening Additions Loss on (or Cost) BookValue(Disposals) Sale
Depn Rate
Depn Method
501 -
20% 10% 2.5% 10% 0% 10% 5% 10% 2.5% 10% 10% 6% 2% 2% 0% 10.0% 13.5% 10.0% 0%
SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL
6,570 6,986 455 1,751 80,692 496 188 193 189 -
2.5% 0% 7% 11% 11%
SL SL SL SL SL
157 18,311 1,195 42
Wharf/Livestock Assets Cement Mixer Concrete Barriers Container Building Fish Wharf Upgrade Land-TikiTiki Hill Plant & Machinery Pitt Island Wharf Security/Fire Protection System Stock Facilities Wharf Flood Lights T-Head Electrical Cabling - T-Head New Concrete Jetty (access to T Head) Fisherman's Wharf Land Reclamation Retaining Wall Zip 7Ltr boiler Water Jet Pump Pitt Island Wharf (WIP)
5,000 4,060 262,798 54,716 25,000 10,855 209,571 7,149 70,041 8,384 809,323 8,274 930,433 144,987 226,665 1,882 1,431 1,890 12,689
135,557 25,000 94,767 3,076 59,003 80,692 6,621 537,729 83,792 226,665 1,537 1,125 1,701 11,657
Bulk Fuel Site Assets Bulk Fuel Area Fencing Land - Tank Site Diesel Fuel Tanks Bulk Fuel Diesel Pump Bulk Fuel Diesel Pump No 2
25,050 20,000 261,583 10,864 4,550
20,000 185,287 8,374 4,508
25,050 -
-
3,117,196
1,487,093
25,582
501
Less Disposals Totals
-
3,117,196
-
1,487,093
(501) 1,032
-
25,582
-
501
Depn Impairment Accumulated Closing Value Value Depreciation BookValue
117,226
43,891 134,432 20,948 -
4,060 133,811 54,716 10,855 165,681 4,528 12,789 8,384 809,323 2,149 527,136 82,143 533 499 378 -
128,987 25,000 43,891 2,621 57,252 6,125 403,297 62,844 226,665 1,349 932 1,512 12,689
157 94,607 3,685 83
24,893 20,000 166,976 7,179 4,467
199,271
1,915,517
1,196,678
199,271
1,915,517
-
-
117,226
-
-
1,196,678
The total rateable value of land and buildings owned by Chatham Islands Ports Limited as at 30 June 2014 was $4,481,000 (30 June 2013 $4,481,000).
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 37
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
9.7
Chatham Islands Shipping Limited
Description of Asset
Valuation Opening Additions Depn (or Cost) BookValue (Disposals) (Loss) on Sale
Motor Vehicles Electric 1t Forklift Hyster 4t Forklift Isuzu 3t Truck Lees 8t forklift Subaru Legacy Car TCM 1t forklift TCM 1t forklift 1973 Domett Semi-Trailer 8x4 Truck, 6x4 Truck, 1 Semi trailer Mitsubishi 6x4 Tractor Unit 1993 Mitsibishi Canter Truck SD3043 Isuzu 8x4 Flatdeck (BSD358)
Office Equipment Fax, Phone, Laptop Filling Cabinet & Assorted Office Equipment Office Computer Laptop with Microsoft Office Laptop with Microsoft Office Jasper Executive Chair Filing Cabinet (Napier Office) Plant and Equipment 10ft Shipping Container 20ft container base Big Chiller/Freezer Double door chiller Navigation Computer and Software Single door chiller Small portable freezers in frames (3) Spare Millfelts Steel freight cages Water Troughs & Feed Trays XRS Wand - Cattle Scanning Condnsing Units (2) 2 Pack VHF Radios Water Blaster Devies Submersible Pump Lift Raft Lift Raft Solas A Pack Oven Yokohama Fender Lifting Frames Isuzu 24ft Deck Crate Crate Stands 30HP Outboard Motor
Less Disposals Totals
9,615 11,538 4,808 14,423 2,885 6,731 6,731 3,913 8,000 2,000 2,750 10,000
6,442 7,731 3,221 9,663 1,933 4,510 4,510 6,240 1,560 -
962 962 962 1,130 1,130 417 217
644 644 644 -
3,846 1,923 15,385 962 4,808 481 4,808 962 3,365 3,846 1,996 6,050 580 1,040 739 4,139 5,870 1,754 3,495 1,320 6,957 1,600 4,187
2,577 1,288 10,308 644 3,221 322 3,221 644 2,255 2,577 1,630 4,719 532 1,011 719 4,025 1,706 -
169,281
89,143
-
169,281
-
Depn Rate
Depn Method
33% 33% 33% 33% 33% 33% 33% 33% 33% 33% 33% 33%
SL SL SL SL SL SL SL SL SL SL SL SL
3,173 3,808 1,587 4,760 952 2,221 2,221 1,291 2,640 660 908 825
6,346 7,615 3,173 9,519 1,904 4,442 4,442 1,291 4,400 1,100 908 825
3,269 3,923 1,635 4,904 981 2,288 2,288 2,622 3,600 900 1,843 9,175
SL SL SL SL
-
33% 33% 33% 40% 40% 11% 9%
SL SL
317 317 317 204 203 15 5
635 635 635 204 203 15 5
327 327 327 926 926 402 212
3,495 1,320 6,957 1,600 4,187
-
33% 33% 33% 33% 33% 33% 33% 33% 33% 33% 20% 33% 33% 33% 33% 33% 18% 33% 33% 18% 10% 10% 30%
SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL SL
1,269 635 5,076 316 1,587 158 1,587 317 1,111 1,269 399 1,997 191 343 244 1,366 1,057 579 961 165 174 40 314
2,538 1,269 10,153 634 3,173 316 3,173 635 2,221 2,538 765 3,328 239 372 264 1,480 1,057 627 961 165 174 40 314
1,308 654 5,232 328 1,635 164 1,635 327 1,144 1,308 1,231 2,723 341 668 475 2,659 4,813 1,127 2,534 1,155 6,783 1,560 3,873
42,984
-
47,568
84,732
84,558
3,913
2,750 10,000
1,130 1,130 417 217
5,870
-
-
Depn Value
Accumulated Closing Depreciation BookValue
-
-
-
-
-
-
89,143
42,984
-
47,568
84,732
84,558
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 38
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
The carrying book value amounts of property, plant and equipment are analysed as follows:
Group As at
30-Jun-14 NZ$
Chatham Islands Management Limited Opening carrying amount Additions Impairment Depreciation Closing carrying amount Chatham Islands Airport Limited Opening carrying amount Additions Depreciation Closing carrying amount Chatham Islands Electricity Limited Opening Carrying Amount Additions Prior Period Adjustment Depreciation Closing carrying amount Chatham Islands Asset Holdings Limited Opening Carrying Amount Gain/(Loss) on Sale of Fixed Assets Additions Disposals Transfer to CIAH (Cook Islands) Limited Depreciation Closing carrying amount
30-Jun-13 NZ$
608,307 23,071 631,378 39,745 591,632
661,902 43,981 705,883 57,501 40,075 608,307
1,768,581 19,523 1,788,104 70,554 1,717,549
1,633,036 202,482 1,835,518 66,940 1,768,581
2,169,431 108,152 3,768 2,281,351 109,464 2,171,887
2,315,144 5,853 2,320,997 151,566 2,169,431
2,756,632 118,750 2,875,382 400,000 2,024,544 120,987 329,852
559,249 3,371,603 3,930,852 1,039,586 134,635 2,756,632
CIAH (Cook Islands) Limited Opening Carrying Amount Additions Impairment Depreciation Closing carrying amount
2,024,544 239,276
-
2,263,820
-
956,751 110,624 1,196,445
-
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 39
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Chatham Islands Ports Ltd Opening Carrying Amount Additions
Group 1,487,092 25,581 1,512,673
1,611,066 18,097 1,629,163
Impairment Depreciation Gain on Sale of Assets Closing carrying amount
199,271 117,226 501 1,195,676
142,072 1,487,092
89,143 42,984 132,127 47,568 84,558
626,298 626,298 500,000 37,156 89,143
8,879,186 458,587 119,251 3,768 9,460,792
6,780,399 4,268,314 11,048,713 1,539,586 572,444 57,501 8,879,186
Chatham Islands Shipping Ltd Opening Carrying Amount Additions Disposals Depreciation Closing carrying amount Total Property, Plant and Equipment Opening Carrying Amount Additions Gain/(Loss) on Sale of Fixed Assets Prior Period Adjustment
Disposals Depreciation Impairment Total carrying amount
400,000 616,168 1,156,022 7,288,601
All depreciation charges are included in “depreciation” in the Statement of Comprehensive Income.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 40
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
10.
Trade and other payables Group
For the year to
30-Jun-14 NZ$
Trade payables Accruals Total closing payables
Parent 30-Jun-13 NZ$
443,109 282,074 725,182
186,422 247,514 433,934
30-Jun-14 NZ$
30-Jun-13 NZ$
11,270 81 11,351
11,749 11,749
Due to their short duration, management considers the carrying amounts of trade and other payables recognised in the Statement of Financial Position to be a reasonable approximation of their fair value.
11.
Operating cashflow reconciliation Group
For the year to
Reported surplus (deficit) Non cash items Depreciation Impairment of assets Gain on disposal of forestry Emission trading scheme income Emission trading scheme expense Gifting of Pitt Island Barge Inter-entity dividends Unrealised gain on forrestry assets Trading losses of company funded Interest from trading companies Portfolio monitoring fees Unrealised gains on equity investments Income in Advance South coast lines adjustment to fair value Fair Value Write-Down Amortisation of wind resource consent Bad debt provision Changes in working capital Trade and other payables Employee entitlements Inventory RWT refund received/(Paid) Trade and other receivables Net cash flow from operating activities
30-Jun-14 NZ$
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
1,292,867 493,146 1,117,173 (9,112) 846,723 (215,934) 26,812 2,429,350 (14,642) 12,954 10,727 16,227 6,006,290
60,382 572,439 457,501 (1,172,093) 119,733 (16,876)
917,416 (1,000,000) 538,977 (354,817) 26,802 (286,321)
10,727 16,493 48,307
(157,944)
(151,958)
(42,303) 9,474 102,979 140,262 210,412 6,216,700
197,680 (5,332) 31,644 4,377 (418,129) (189,760) (141,454)
(479) 20,437 19,958 (137,986)
(6,789) (23,974) (30,763) (182,720)
-
(203,132) (530,000) 779,819 (198,645) -
-
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 41
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
12.
Cash and cash equivalents
As at
30-Jun-14 NZ$
ANZ current account BNZ current account Dawsons Trust account Total cash
13.
30-Jun-13 NZ$
4,813,238 989,123 5,802,361
30-Jun-14 NZ$
1,145,947 3,349 8,266 1,157,562
812,790 812,790
30-Jun-13 NZ$ 958,712 958,712
Income in Advance
During the year, Chatham Islands Management Limited commenced construction of the new Pitt Island Wharf. The construction is being funded by a government grant receipt of $5,000,000. Monthly payments are made to Chatham Islands Management Limited to reimburse costs incurred on the project, based on the stage of completion of the wharf. As required by NZ IAS 18 (Revenue), the unspent portion of the grant is held as a liability in the Statement of Financial Position until the wharf is completed. The liability will continue to be reduced as completion of the wharf progresses and as the Department of Internal Affairs continues to approve the reimbursement of the monthly costs incurred on the project. As at 30 June 2014, income received in advance is $2,792,832 (30 June 2013: $363,482) Any interest received from the interest-bearing bank account holding the grant will be held as contingency funding for the project and will be added to Income in Advance as disclosed in the Statement of Financial Position. 14.
Related party transactions
Inter-Group Transactions and Balances During the year, financial advances were made between the Trust and its trading companies. These advances consist of payments made to the various trading companies to facilitate working capital requirements. For the purposes of this annual report, where a trading company has made a loss in the period to 30 June 2014, the Trust has provided a grant to cover the loss. Advances were made as follows: CIM
CIA
Accumulated advances to (from) Grants made to companies to cover losses Prior year accumulated losses Current year losses
8,613,416
1,972,603
2,040,972 -
912,518 186,198
Advance shown as asset Advance shown as a liability
2,886,233 -
468,440
CIE
CIAH
526,688
2,018,239
-
224,402
-
3,527,905 -
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 42
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
CIAH (CI)
Accumulated advances to (from) Grants made to companies to cover losses Prior year accumulated losses Current year losses
-
Advance shown as asset Advance shown as a liability
-
CIP
CIQH
CIS
3,297,785
49,027
1,301,250 352,779
-
1,169,879
623,213
Total
350,000 -
350,000 -
16,827,758 4,254,740 538,977
6,764,139 2,485,934
Key Management Personnel, Trustees and Directors Key management personnel include trustees, directors of the trading companies and chief executive. The total compensation paid to key management personnel was $363,401 (2013: $324,983). This was all salaries and short term benefits. A summary of director appointments and resignations for the year ended 30 June 2014 as follows: Chatham Islands Airport Limited Appointments:
Latoya Hough
13 December 2013
Resignations:
Brent Mallinson
13 December 2013
Chatham Islands Electricity Limited Appointments:
Paul Smith
13 December 2013
Resignations:
Phil Seymour
30 November 2013
Chatham Islands Management Limited Appointments:
Latoya Hough
1 December 2013
Paul Smith
1 December 2013
Resignations:
Phil Seymour
30 November 2013
Jason Seymour
30 November 2013
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 43
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Chatham Islands Ports Limited Appointments:
Latoya Hough
Greg Horler
13 November 2013 1 July 2013
Resignations:
Jason Seymour
30 November 2013
Chatham Islands Asset Holdings Limited Appointments:
Latoya Hough
1 December 2013
Paul Smith
1 December 2013
Resignations:
Phil Seymour
30 November 2013
Jason Seymour
30 November 2013
Chatham Islands Enterprise Trust Resignations:
Brian Harris
30 May 2014
Where a Trustee, Director or member of staff have entered into related party transactions with the Trust and its trading companies, the nature and amount of the transaction has been disclosed in the Chairman’s Report of the Trust or the appropriate company. Directors and Trustee Remuneration The board remuneration policy is to ensure the remuneration package properly reflects the individual’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 44
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Details of the nature and the amount of each major element of emoluments of each director of the trust are: Directors Fees
Directors & trustees
Stuart Hughes Brent Mallinson Darron Kyle Dennis Nesbit Ian Maxwell Latoya Hough Phillip Seymour Peter Dowling Steven Joyce Jason Seymour Dave Sharp Donna Gregory-Hunt Carol Nielsen Paul Smith Greg Horler
Trustees Fees
6,000 10,083 5,000 8,000 8,000 5,833 3,333 8,000 8,000 2,083 5,000 5,000 4,667 5,000
$
Salary
21,787 13,760 8,027 11,467 5,733 13,760 8,027 -
84,000
$
82,560
Other Fees
4,128 -
$
4,128
Total
1,032 5,217 1,301 418 793 2,092 9,967 3,577
$
24,398
7,032 37,087 5,000 8,000 23,061 17,988 15,218 8,793 10,092 7,816 9,967 18,760 5,000 12,694 8,577
$
195,085
Other Related Parties During the year, Chatham Islands Management Limited provided management services to the Chatham Islands Enterprise Trust and the following companies within the group:
For the year to
30-Jun-14 NZ$
Chatham Islands Enterprise Trust Chatham Islands Airport Limited Chatham Islands Electricity Limited Chatham Islands Asset Holdings Limited Chatham Islands Ports Limited Chatham Islands Quota Holdings Limited Chatham Islands Shipping Limited Total
130,525 60,000 163,000 10,000 59,000 85,000 25,690 533,215
30-Jun-13 NZ$ 130,525 60,000 163,000 5,000 59,000 85,000 25,000 527,525
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 45
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
During the year, Chatham Islands Electricity Limited provided electrical services to the following companies within the group:
For the year to
30-Jun-14 NZ$
Chatham Islands Airport Limited Chatham Islands Shipping Limited Chatham Islands Ports Limited Chatham Islands Management Limited Total
8,141 1,607 21,854 10,665 42,267
30-Jun-13 NZ$ 7,180 2,480 19,183 11,348 40,191
Management and staff of the Trust purchased goods and services from Trust companies at normal commercial rates. Management and staff, as part of their employment packages, can purchase whiteware goods retailed by Chatham Islands Electricity Limited for personal consumption at cost plus 10% plus freight. Chatham Islands Management Ltd provided fuel to the following companies within the group:
For the year to
30-Jun-14 NZ$
Chatham Islands Airport Limited Chatham Islands Electricity Limited Chatham Islands Shipping Limited Total
812 566,951 13,301 581,064
30-Jun-13 NZ$ 603,465 8,337 611,802
Chatham Islands Ports Limited leased bulk fuel tanks to Chatham Islands Management Ltd.
For the year to
30-Jun-14 NZ$
Chatham Islands Management Limited Total
24,257 24,257
30-Jun-13 NZ$ 17,665 17,665
The following directors and trustees purchased, or have a close family member who purchased, an annual catch entitlement (ACE) from Chatham Islands Quota Holdings Limited:
Donna Gregory-Hunt, as shareholder of Taiko Quota Limited (as director of Chatham Islands Management Limited, Chatham Islands Quota Holdings Limited and Chatham Islands Asset Holdings Limited; and as trustee of the Chatham Islands Enterprise Trust)
Greg Horler (as director of Chatham Islands Ports Limited)
ACE prices are the same as for all ACE holders and the independent director oversees the process for allocation of ACE. The purchasers listed above declare an interest and play no part in the ACE allocation. Dave Sharp, as a director of Chatham Islands Quota Holdings Limited, received consulting fees for services provided to Chatham Islands Quota Holdings Limted totalling $9,967.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 46
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Dennis Nisbet, as director of Chatham Islands Shipping Limited, is a director and shareholder of Transport & Marine Limited. During the year, Transport & Marine Limited provided goods and services to the following companies in the group:
For the year to
30-Jun-14 NZ$
Chatham Islands Shipping Limited CIAH (CI) Limited Total
1,149,339 15,534 1,164,873
30-Jun-13 NZ$ 449,515 210,418 659,933
Of the amount paid by Chatham Islands Shipping Limited, $760,970 was for crew wages, $99,996 for management services and $21,401 for administration. The balance related to sundry costs and purchases in maintaining the Baldur and Southern Tiare. During the year, Chatham Islands Shipping Limited provided freight and other services to the following companies within the group: For the year to
30-Jun-14 NZ$
Chatham Islands Management Limited Chatham Islands Enterprise Trust Chatham Islands Airport Limited Chatham Islands Electricity Limited CIAH (CI) Limited Chatham Islands Ports Limited Total
290,952 117 3,830 12,876 6,320 564 314,658
30-Jun-13 NZ$ 243,530 4,071 7,918 70,465 41 326,025
During the year, Chatham Islands Asset Holdings Limited and CIAH (Cook Islands) Limited provided leased vessels Baldur and Southern Tiare to Chatham Islands Shipping Limited.
For the year to
Baldur Lease Southern Tiare Lease Total
30-Jun-14 NZ$ 42,300 288,000 330,300
30-Jun-13 NZ$ 56,400 24,000 80,400
During the year, Chatham Islands Ports Limited provided port services to Chatham Islands Shipping Limited.
For the year to
Chatham Islands Shipping Limited Total
30-Jun-14 NZ$ 68,248 68,248
30-Jun-13 NZ$ 54,957 54,957
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 47
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
15.
Share capital and equity
The trust has an objective of maintaining and growing the equity base of the Trust for the benefit of current and future inhabitants of the Chatham Islands. The Trust carries insurance for all of its operations in accordance with normal commercial practice. The Share Capital has been established at $100 for each of the six companies. Chatham Islands Shipping has been set up with the Trust as 51% shareholder of $800,000 of share capital. The shares are owned by the Chatham Islands Enterprise Trust and are fully paid.
Trust Shares Minority Interest Reserves Opening balance Change in fair value gain/(loss)
Airport -
Electricity
100 -
100 -
8,735,987 286,321
1,004,344 -
Closing Balance
9,022,308
Retained Earnings Opening balance Dividend Net Profit Closing Balance Total Equity
CIAH (Cook Islands) Shares Minority Interest Shares Reserves Opening balance Change in fair value of equities gain/(loss) Foreign exhange gain/(loss) Closing Balance Retained Earnings Opening balance
-
Management
100 -
100 -
331,546 -
-
-
1,004,344
331,546
-
-
1,194,179 631,095 1,825,274
1,210,000 1,210,000
2,651,792 43,491 2,695,283
(51,569) 114,539 62,970
101,177 1,090,282 1,191,459
10,847,580
2,214,444
3,026,925
63,069
1,191,559
Ports 2
Asset Holdings
Quota
Shipping
100
100
2,100,776 2,100,776
2,797,607 2,797,607
Movement for year Closing Balance
(50,047) (966,634) (1,016,681)
263,785 263,785
Total Equity
(1,016,678)
2,364,661
800,000
-
Consolidation Entries (408,602) (413,383) -
Total 392,000 (413,383) 14,970,259 286,321 15,256,580
4,682,282 (1,000,000) 1,392,291 5,074,573
(840,675) (43,640) (884,315)
752,463 1,000,000 (1,230,642) 521,821
9,913,387 1,030,783 10,944,172
7,872,280
(84,315)
(300,164)
26,179,369
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 48
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
2013 Share Capital and Equity
Trust Shares Minority Interest Reserves Opening balance Change in fair value of equities gain/(loss) Foreign exhange gain/(loss) Closing Balance Retained Earnings Opening balance Movement for year Closing Balance Total Equity
Shares Minority Interest Reserves Opening balance Change in fair value of equities gain/(loss) Foreign exhange gain/(loss) Closing Balance Retained Earnings Opening balance Movement for year Closing Balance Total Equity
Airport -
Asset Holdings (Forestry) Management
Electricity
100
100
8,105,971 456,094 (48,752) 8,513,313
1,004,344 1,004,344
331,546 331,546
1,646,603 204,215 1,850,818
1,210,000 1,210,000
2,823,315 (171,523) 2,651,792
(339,927) 768,314 428,387
101,177 101,177
10,364,131
2,214,444
2,983,438
428,487
101,277
Ports
Quota
Shipping 800,000
100
100
-
-
Consolidation Entries (408,602) (411,931)
CIAH (Cooks Islands) 2
-
2
Total
100
100
2,100,776 2,100,776
2,797,607 2,797,607
263,785 263,785
3,661,913 1,020,369 4,682,282
(840,675) (840,675)
72,193 (508,385) (436,192)
9,439,064 472,315 9,911,376
2,364,661
7,479,989
(40,675)
(844,794)
24,639,031
-
-
392,000 (411,931) 14,340,242 456,094 (48,752) 14,747,583
Group 30-Jun-14 NZ$
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
Retained earnings Opening Movement for year Closing
9,911,382 993,941 10,905,322
9,439,064 472,318 9,911,382
1,194,183 631,095 1,825,276
1,397,311 (203,128) 1,194,183
Reserves Opening Movement for year Closing
14,747,580 547,850 15,295,430
14,340,240 407,340 14,747,580
8,735,987 286,321 9,022,306
8,328,646 407,342 8,735,987
Minority Interest Total equity
(21,383) 26,179,369
(19,931) 24,639,031
10,847,580
9,930,169
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 49
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
16.
Contingent assets and contingent liabilities
When the Baldur is sold, any surplus or deficit on sale over or under the original purchase price after allowing for a commercial economic return to the lessor (CIAH) is payable to or receivable from the lessee (CISL). The trust has a net expense of 51% of the resulting gain or loss. Chatham Islands Asset Holdings has planted woodlots on privately owned land under Forestry Rights Agreements. In return for providing a fenced area of land, the landowners will receive a percentage of the return on the forest at harvest, which is estimated to be approximately in 2040. This remains unchanged in 2014. Chatham Islands Management Limited is disputing an invoice in relation to the Pitt Island Wharf construction of $63,085. It is the directors’ belief that this invoice will not be payable and therefore this has not been accrued in the in accounts payable. Other than items noted above there are no other contingent assets or contingent liabilities as at 30 June 2014 (30 June 2013; $0). 17.
Investments in subsidaries
Significant subsidaries comprise:
Name of Entity Chatham Islands Management Limited Chatham Islands Electricity Limited Chatham Islands Asset Holdings Limited Chatham Islands Quota Holdings Limited Chatham Islands Airport Limited Chatham Islands Ports Limited Chatham Islands Shipping Limited CIAH (Cook Islands) Limited
Principal Activities Management Electricity Service Asset Management Quota Management Airport Services Port Services Shipping Services Asset Holdings
Country of Incorporation New Zealand New Zealand New Zealand New Zealand New Zealand New Zealand New Zealand New Zealand
Interest held by Group Balance Date 30-Jun 30-Jun 01-Jul 02-Jul 03-Jul 04-Jul 05-Jul 06-Jul
2014
2013
100 100 100 100 100 100 51 100
100 100 100 100 100 100 51 100
On 2 July 2012 the Trust purchased a shipping service business, 44 South Shipping Limited, which was purchased by Chatham Islands Shipping Limited (CISL). The trust holds 51% of CISL with 44 South Shipping’s previous owner holding the remaining 49%. CIAH (Cook Islands) Limited is 100% owned by Chatham Islands Asset Holdings Limited and its purpose is to manage the ownership of the Southern Tiare.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 50
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
18.
Financial instruments
The accounting policies for financial instruments have been applied to the line items below: Group 30-Jun-14 NZ$
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
FINANCIAL ASSETS Fair Value through Surplus or Deficit Bradley Nuttall Investments TOTAL FAIR VALUE THROUGH SURPLUS OR DEFICIT
4,488,240 4,488,240
4,228,730 4,228,730
4,488,240 4,488,240
4,228,730 4,228,730
Loans and Receivables Cash and Cash Equivalents Chatham Islands Council - Loan Chatham Islands Council - Warm homes project Chatham Islands Council - NKMR South Coast Lines Extension Loan Air Chathams - Loan Baldur Charter Lease Chatham Automotive & Marine Debtors and Other Receivables Loans to Related Parties TOTAL LOANS AND RECEIVABLES
5,802,361 162,302 154,105 9,764 16,179 520,478 273,399 111,468 984,402 8,034,458
1,149,296 173,595 169,962 13,688 19,538 604,436 136,928 1,140,891 3,408,334
812,790 162,302 154,105 9,764 426,830 111,468 6,626 6,764,139 8,448,024
958,712 173,595 169,962 13,688 504,436 136,928 26,983 5,596,414 7,580,718
12,522,698
7,637,064
12,936,264
11,809,448
725,182
791,140
11,351
11,749
3,528,214 4,253,396
1,057,981 1,849,121
2,485,934 2,497,285
2,277,126 2,288,875
TOTAL FINANCIAL ASSETS FINANCIAL LIABILITIES Financial liabilities at amortised cost Trade and Other Payables Borrowings - Secured Loans - Loans From Related Parties TOTAL FINANCIAL LIABILITIES AT AMORTISED COST
Financial Risk Management Objectives The Trust has a treasury policy to manage risk associated with financial instruments. The Trust does not enter into or trade financial instruments, including derivative instruments for speculative purposes. Capital Management The Trust’s capital includes retained earnings and reserves. The Trust is not subject to any externally imposed capital requirements. Credit Risk The Trust's exposure to credit risk is mainly associated with short-term deposits, debtors and fund management of its fixed interest, equity investment portfolio and loans to South Coast Line residents, Chatham Islands Council, Air Chathams, Chatham Automotive and Marine and DMK Shipping Limited for charter payments on the Baldur. The Trust minimises its risk by diversification of investments through the managed funds administered by Bradley Nuttall. There is risk that financial assets will suffer loss through normal market risks. On a consolidated basis, the credit risk associated with debtors is minimal. For several trading companies, the credit risk for debtors is more pronounced, as there is a concentration of debt. Currency Risk There is no exposure to currency risk.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 51
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Interest Rate Risk There is some exposure to interest rate risk in relation to funds managed by Bradley Nuttall, but portfolio managers actively manage fixed interest investments to reduce this risk. The Trust is exposed to interest rate risk on advances to South Coast Line loan, Chatham Island Council loan, Air Chathams loan, Chatham Automotive and Marine loan. It is also exposed to risk on the loans from Bank of New Zealand. Financial assets and liabilities exposed to interest rate risk are as follows: Group As at
Chatham Islands Council - Loan Chatham Islands Council - Warm homes project Chatham Islands Council - NKMR South Coast Line Extension Air Chathams - Loan Chatham Automotive & Marine Total Financial Assets
30-Jun-14 NZ$
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
162,302 154,105 9,764 16,179 520,478 111,468 974,296
173,595 169,962 13,688 19,538 604,436 136,928 1,118,147
162,302 154,105 9,764 426,830 111,468 864,469
173,595 169,962 13,688 504,436 136,928 998,609
Current portion BNZ Term Loan
1,415,587
216,902
-
-
Term Portion BNZ Term Loan
2,112,627
1,057,981
-
-
Total Financial Liabilities
3,528,214
1,274,883
-
-
Financial Liabilities
Split
The term loans are secured by mortgages over the assets of Chatham Islands Quota Limited. The loans have current interest rates of 6.88% which is fixed for a period of 4.5 years from 1 July 2014, 6.3% fixed for a 5 year period from 23 July 2012, and 6.62% fixed for a 4.5 year period from 12 December 2013. The carrying value of the financial liabilities represents the maximum exposure of the Trust. Market Risk The Trust has a market risk associated with its portfolio of shares. The portfolio is diversified over a number of listed companies, with no undue exposure. There is also market risk associated with the recession being experienced in the New Zealand economy. The carrying amounts of the financial assets and financial liabilities recorded in the financial statements approximate their fair values. The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 52
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Sensitivity Analysis In managing interest rate risks, the Trust aims to reduce the impact of short term fluctuations on the earnings. Over the longer term, however, changes in interest rates will affect reported profits. The following tables summarises the impact of interest rate changes: Effect on equity 30-Jun-14 30-Jun-13 NZ$ NZ$
For the year to
Effect on net profit 30-Jun-14 30-Jun-13 NZ$ NZ$
Financial Liabilities 1% increase in interest rates 1% decrease in interest rates
(35,282) 35,282
(12,673) 12,673
(35,282) 35,282
(12,673) 12,673
Financial Assets 1% increase in interest rates 1% decrease in interest rates
9,806 (9,806)
11,181 (11,181)
9,806 (9,806)
11,181 (11,181)
Net Effect 1% increase in interest rates 1% decrease in interest rates
(25,476) 25,476
(1,491) 1,491
(25,476) 25,476
(1,491) 1,491
Credit Quality of Financial Assets The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard and Poor’s credit ratings (if available) or to historical information about counterparty default rates. Group 30-Jun-14 NZ$ COUNTERPARTIES WITH CREDIT RATINGS Cash at bank and term deposits AA AATotal Cash at Bank and Term Deposits Fair Value Financial Assets AA Total Fair Value Financial Assets
Parent 30-Jun-13 NZ$
5,802,361 5,802,361
-
1,149,296 1,149,296
-
30-Jun-14 NZ$
30-Jun-13 NZ$
812,790 812,790
-
958,712 958,712
-
COUNTERPARTIES WITHOUT CREDIT RATINGS Fair Value Financial Assets Existing couterparty with no defaults in the past Total Fair Value Financial Assets
5,735,935 5,735,935
5,346,877 5,346,877
5,352,709 5,352,709
5,090,411 5,090,411
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 53
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Contractual Maturity of Financial Liabilities, Excluding Derivatives The table below analyses the Parent and Group’s financial liabilities into relevant maturity groupings based on the remaining period at balance date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows and include interest payments.
Carrying Amount $NZ
Contractual Cash Flows $NZ
Less than 1 Year
1-2 Years
$NZ
$NZ
2-5 Years More Than 5 Years $NZ
$NZ
Group 2014 Trade and Other Payables Borrowings - Secured Loans - Loans From Related Parties TOTAL
725,182
725,182
725,182
-
-
-
3,528,214
3,814,160
1,575,392
1,137,048
1,101,720
-
4,253,396
4,539,343
2,300,574
1,137,048
1,101,720
-
791,140
791,140
791,140
1,057,981
1,504,458
275,455
357,792
871,211
-
1,849,121
2,295,599
1,066,595
357,792
871,211
-
11,351
11,351
11,351
-
-
-
2,485,934 2,497,285
2,485,934 2,497,285
2,485,934 2,497,285
-
-
-
11,749
11,749
11,749
-
-
-
2,277,126 2,288,875
2,277,126 2,288,875
2,277,126 2,288,875
-
-
-
Group 2013 Trade and Other Payables Borrowings - Secured Loans - Loans From Related Parties TOTAL
-
-
-
Parent 2014 Trade and Other Payables Borrowings - Loans From Related Parties TOTAL
Parent 2013 Trade and Other Payables Borrowings - Loans From Related Parties TOTAL
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 54
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
Contractual Maturity of Financial Assets The table below analyses the Parent and Group’s financial assets into relevant maturity groupings based on the remaining period at balance date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows and include interest receipts.
Carrying Amount $NZ
Contractual Cash Flows $NZ
Less than 1 Year
1-2 Years
$NZ
$NZ
2-5 Years More Than 5 Years $NZ
$NZ
Group 2014 Cash and Cash Equivalents Debtors and Other Receivables Chatham Islands Council - Loan Chatham Islands Council - Warm Homes Project Chatham Islands Council - NKMR Air Chathams Loan Baldur Charter Lease Chatham Automotive & Marine South Coast Lines Extension Loan TOTAL
5,802,361 984,402 162,302 154,105 9,764 520,478 273,399 111,468 16,179 8,034,458
5,802,361 984,402 241,170 180,957 11,689 598,211 280,000 127,842 238,000 8,464,632
5,802,361 984,402 21,925 25,534 4,683 231,176 280,000 34,866 18,000 7,402,946
21,925 25,534 4,683 203,615 34,866 18,000 308,622
65,774 76,602 2,323 163,420 58,110 54,000 420,230
131,547 53,286 148,000 332,834
1,149,296 1,140,891 173,595 169,962 13,688 604,436 136,928 19,538 3,408,334
1,149,296 1,140,891 268,576 211,094 16,371 675,523 162,708 238,000 3,862,459
1,149,296 1,140,891 21,925 25,534 4,683 257,093 34,866 18,000 2,652,288
21,925 25,534 4,683 231,339 69,732 18,000 371,212
65,774 76,602 7,006 187,090 58,110 54,000 448,582
158,953 83,423 148,000 390,376
812,790 6,626 162,302 154,105 9,764 426,830 111,468 6,764,139 8,448,024
812,790 6,626 241,170 180,957 11,689 496,339 127,842 6,764,139 8,641,552
812,790 6,626 21,925 25,534 4,683 154,365 34,866 6,414,139 7,474,928
21,925 25,534 4,683 178,553 69,732 350,000 650,427
65,774 76,602 2,323 163,420 23,244 331,364
131,547 53,286 184,834
958,712 26,983 173,595 169,962 13,688 504,436 136,928 5,596,414 7,580,718
958,712 26,983 268,576 211,094 16,371 573,640 136,928 5,596,414 7,788,718
958,712 26,983 21,925 25,534 4,683 155,211 162,708 5,596,414 6,952,169
21,925 25,534 4,683 231,339 69,732 353,212
65,774 76,602 7,006 187,090 92,976 429,448
158,953 83,423 242,376
Group 2013 Cash and Cash Equivalents Debtors and Other Receivables Chatham Islands Council - Loan Chatham Islands Council - Warm Homes Project Chatham Islands Council - NKMR Air Chathams Loan Chatham Automotive & Marine South Coast Lines Extension Loan TOTAL
Parent 2014 Cash and Cash Equivalents Debtors and Other Receivables Chatham Islands Council - Loan Chatham Islands Council - Warm Homes Project Chatham Islands Council - NKMR Air Chathams Loan Chatham Automotive & Marine Loans to Related Parties TOTAL
Parent 2013 Cash and Cash Equivalents Debtors and Other Receivables Chatham Islands Council - Loan Chatham Islands Council - Warm Homes Project Chatham Islands Council - NKMR Air Chathams Loan Chatham Automotive & Marine Loans to Related Parties TOTAL
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 55
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
19.
Capital commitments
Chatham Islands Forestry Limited has planted woodlots on privately owned land under Forestry Rights Agreements. In return for providing a fenced area of land, the landowners will receive a percentage of the return on the forest at harvest, which is estimated to be approximately in 2040. This remains unchanged in 2014. The Trust Group has a capital commitment to complete construction and payments on the new Pitt Island Wharf. This project is funded by the Department of Internal Affairs by a $5 million grant. The estimated remaining cost of the project at balance date is $2,792,832. Other than the items stated above, there are no other capital commitments (2013: $0).
20.
Forestry assets
During the 1996/97 financial year, a total of 29.0 hectares of Macrocarpa was planted as part of the Chatham’s Forestry Project. A total of 21.7 hectares was planted under Forestry Rights Agreements with three private land owners. The balance of 7.3 hectares was planted on land owned by Chatham Islands Asset Holdings Limited. During the 1997/98 financial year, a total of 34 hectares of Macrocarpa and 13 hectares of Pine were planted on privately owned land under a Forestry Rights Agreement. During the 1998/99 financial year, a total of 18 hectares of Macrocarpa was planted on land owned by Chatham Islands Forestry Limited. A further 20 hectares of Macrocarpa was planted on the same property during the 1999/2000 financial year. As at 30 June 2014, $381,754 had been invested in the Chatham’s Forestry project. At balance date, a valuation of the forestry assets was completed by Ian Moore of Moore + Associates Land Management Consultants. The value of the forestry block was determined to be $597,688 (2013: $381,754). During the year, the directors approved the revaluation of the forestry block to its current fair value. This resulted in a fair value movement of $215,934, which is disclosed in the Statement of Comprehensive Income. Group 30-Jun-14 NZ$ Chatham's Forest Opening book value Gain/(Loss) arising from changes in fair value Closing net book value Mahia Forest Opening book value Sale of Mahia Forest Gain/(Loss) arising from changes in fair value less Estimated point of sale costs Closing net book value Total Forestry Assets
381,754 215,934 597,688
597,688
30-Jun-13 NZ$ 381,754 381,754
2,067,000 (2,067,000) 381,754
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 56
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
21.
Inventories
For the year to
30-Jun-14 NZ$
Fuel - Chatham Islands Management Ltd Fuel - Chatham Islands Electricity Ltd Fuel - Chatham Islands Shipping Ltd Consumables - Chatham Islands Electricity Ltd
22.
30-Jun-13 NZ$
317,459 39,706 21,000
400,115 53,249 74,550
291,803 669,967
245,032 772,946
Employee benefits Group
For the year to
Annual leave provision Provision for bonuses Total closing employee entitlements
23.
30-Jun-14 NZ$ 17,563 24,080 41,643
Parent 30-Jun-13 NZ$
30-Jun-14 NZ$
30-Jun-13 NZ$
-
-
32,169 32,169
Lease commitments
On 10 August 2010 Chatham Islands Electricity entered a Build Own Operate Transfer (“BOOT”) contract with Chatham Island Wind Limited. This was for the lease of wind turbines for 20 years. After 20 years ownership would transfer to Chatham Islands Electricity Limited. The company has a minimum annual contract commitment to pay Chatham Island Wind Limited. This is set out in the schedule to the contract. There are provisions in the contract for minimum load guarantees to be supplied by Chatham Islands Electricity and minimum wind penetration targets to be met by Chatham Island Wind Limited that may alter the minimum guaranteed payment depending on circumstances in any one year.
Group 30-Jun-14 30-Jun-13 NZ$ NZ$ Lease Payments Expensed Lease Commitments: Within 1 year 1 to 5 Years More Than 5 Years
Parent 30-Jun-14 30-Jun-13 NZ$ NZ$
335,308
335,790
-
-
548,777 2,385,862 8,438,947 11,373,586
530,906 2,308,308 9,065,278 11,904,492
-
-
On 22 April 2014, Chatham Islands Shipping Limited entered into a 10 month charter contract for the charter for the Baldur. As at 30 June 2014, seven months of this contract was still to run, being $280,000 (2013: $0). Chatham Islands Shipping Limited on-pays this charter lease to Chatham Islands Asset Holdings Limited.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 57
Chatham Islands Enterprise Trust and Subsidiaries For the year ended 30 June 2014 Notes to the Financial Statements
24.
Business Combination
On 2 July 2012, Chatham Islands Shipping Limited purchased the shipping assets of 44 South Shipping Company Limited. The business was aquired as part of the Trust’s strategic plan. 44 South Shipping Company Limited operated a vessel freight transportation business which operated on the routes from Napier and Timaru to the Chatham Islands. Chatham Islands Shipping Limited purchased the business of 44 South Shipping Company Limited as a going concern. To faciliate the purchase, Chatham Islands Enterprise Trust invested $408,000 as ordinary shares. 44 South Shipping Company Limited invesed $392,000 as ordinary shares. This gave the Trust 51% control of the business with 49% being held by 44 South Shipping Company Limited. The 49% of shares held by 44 South Shipping Company Limited are now held by Dennis Nesbit. On 2 July 2012 the Vessel “Baldur” was sold for $500,000 by Chatham Islands Shipping Limited to Chatham Islands Asset Holdings Limited.
The fair value of the assets acquired at 2 July 2012 were as follows:
NZ$ 500,000 100,000 400,000 1,000,000
Vessel Property, Plant & Equipment Goodwill Total
During the year, a loss of $43,640 resulted, $22,256 belongs to the Trust being 51% with $21,383 belonging to Dennis Nesbit.
25.
Significant Events Subsequent to Balance Date
It is planned that the Pitt Island Wharf will be completed by October 2014, with construction payments being approved post balance date to Chatham Islands Management Limited. Chatham Islands Quota Holdings Limited made a balloon repayment on its loans of $987,000 in July 2014. A new power supply agreement is intended to be signed in September 2014 between Chatham Islands Electricity Limited and Chatham Island Wind Limited. Other than the items mentioned there were no other significant events subsequent to balance date.
PROMOTING ECONOMIC D EVELOPMENT AND WELLB EING 58
CHATHAM ISLANDS ENTERPRISE TRUST AND SUBSIDIARIES TRADING COMPANIES CHATHAM ISLANDS MANAGEMENT LIMITED Statement of Comprehensive Income for the Year Ended 30 June 2014 30 June 2014 INCOME Management Fees Trading Income Grants Received Rent Received Sundry Income Total Income EXPENDITURE Cost of Sales Audit Fees - Company Audit Fees - Group Allocation Administrative Costs Economic Development Pitt Island Barge Gift Employee Costs Financing Fees Bad Debts Trustees Fees & Disbursements Shipping Expenses Impairment Depreciation Fair Value Adjustment TOTAL EXPENDITURE OPERATING SURPLUS/(DEFICIT)
515,500 1,924,386 2,228,892 22,390 10,859 4,702,026
510,500 1,863,555 22,360 21,269 2,417,683
$
1,707,070 9,235 16,478 207,895 92,425 846,724 494,254 885 10,964 111,260 39,747 6,353 3,543,289 1,158,738 1,586 (85,996) (84,410) 1,074,328 1,074,328
1,717,954 6,390 10,000 202,542 188,519 399,744 3,164 10,111 88,244 49,853 57,501 40,075 2,774,097 (356,413) 3,474 (71,382) (67,908) (424,321) 424,321 -
$
101,277 1,074,328 1,175,605
101,277 101,277
$
Interest Income Interest Expenditure NET FINANCE INCOME SURPLUS/(DEFICIT) FOR THE PERIOD
Grant from Owner (Enterprise Trust) Other Comprehensive Income TOTAL COMPREHENSIVE INCOME
30 June 2013
CHATHAM ISLANDS MANAGEMENT LIMITED Statement of Changes in Equity for the Year Ended 30 June 2014 Equity at the Start of the Period Total Comprehensive Income Equity at the End of the Period CHATHAM ISLANDS MANAGEMENT LIMITED Statement of Financial Position as at 30 June 2014 30 June 2014 SHAREHOLDERS EQUITY Share Capital Retained Earnings
30 June 2013
100 1,175,505 1,175,605
100 101,177 101,277
3,642,030 317,459 312,901 10,032 68,647 161,485 4,512,554
11,034 400,115 339,008 42,940 75,000 660,547 58,904 1,587,547
NON CURRENT ASSETS Loan Air Chathams Pitt Islands Wharf Project Property, Plant and Equipment
25,000 2,219,338 591,632
25,000 608,307
TOTAL ASSETS
7,348,525
2,220,855
CURRENT LIABILITIES Trade and Other Payables Employee Entitlements Income in Advance Chatham Islands Enterprise Trust TOTAL LIABILITIES NET ASSETS
486,300 7,556 2,792,832 2,886,233 6,172,921 1,175,605
165,532 20,432 1,933,615 2,119,579 101,277
$ REPRESENTED BY: CURRENT ASSETS ANZ Bank Stock on Hand Debtors Prepaid Expenses Current Portion - Loan Air Chathams Landing Barge GST
$
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC DEVELO PMENT AND WELLBEING 62
CHATHAM ISLANDS ENTERPRISE TRUST AND SUBSIDIARIES TRADING COMPANIES CHATHAM ISLANDS ELECTRICITY LIMITED Statement of Comprehensive Income for the Year Ended 30 June 2014 30 June 2014
30 June 2013
INCOME Trading Income Sundry Income Rent Received Write back of South Coast Lines to Fair Value Total Income EXPENDITURE Cost of Sales Operating Costs Administrative Costs Audit Fees - Company Bad Debts Audit Fees - Group Allocation Employee Costs Directors Fees Financing Fees Management Fees Depreciation TOTAL EXPENDITURE OPERATING SURPLUS/(DEFICIT)
1,860,753 115 10,600 14,642 1,886,110
1,793,501 2,143 9,950 16,876 1,822,470
$
1,067,426 394,608 66,503 9,235 1,415 5,765 3,773 24,000 163,000 105,696 1,841,421 44,688 378 (1,574) (1,196) 43,493 43,493
1,225,706 318,825 68,413 6,390 6,382 11,895 17,938 23,333 934 163,000 151,566 1,994,383 (171,913) 389 389 (171,525) (171,525)
$
2,983,437 43,493 3,026,931
3,154,961 (171,525) 2,983,437
$
Interest Income Interest Expenditure NET FINANCE INCOME SURPLUS/(DEFICIT) FOR THE PERIOD
Other Comprehensive Income TOTAL COMPREHENSIVE INCOME
CHATHAM ISLANDS ELECTRICITY LIMITED Statement of Changes in Equity for the Year Ended 30 June 2014 Equity at the Start of the Period Total Comprehensive Income Equity at the End of the Period
CHATHAM ISLANDS ELECTRICITY LIMITED Statement of Financial Position as at 30 June 2014 30 June 2014 SHAREHOLDERS EQUITY Share Capital Income Appropriation Account Reserves $
100 2,695,279 331,546 3,026,925
30 June 2013 100 2,651,787 331,546 2,983,433
REPRESENTED BY: CURRENT ASSETS ANZ Bank Debtors South Coast Line Extension Loans Provision for Impaired Debtors Stock on Hand GST Chatham Islands Enterprise Trust
54,421 349,600 15,082 (14,743) 331,509 6,691 224,402 966,961
NON CURRENT ASSETS South Coast Line Extension Loans Intangible Asset Property, Plant and Equipment
14,728 354,382 14,961 (12,931) 298,281 179,518 848,939
TOTAL ASSETS
1,097 171,630 2,171,887 2,344,615 3,311,575
4,577 182,357 2,169,430 2,356,364 3,205,302
CURRENT LIABILITIES Trade and Other Payables Employee Entitlements GST TOTAL LIABILITIES NET ASSETS
274,644 10,007 284,650 3,026,925
205,348 11,737 4,783 221,869 2,983,433
$
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC DEVELO PMENT AND WELLBEING 63
CHATHAM ISLANDS ENTERPRISE TRUST AND SUBSIDIARIES TRADING COMPANIES CHATHAM ISLANDS ASSET HOLDINGS LIMITED (Consolidated) Statement of Comprehensive Income for the Year Ended 30 June 2014 INCOME
30 June 2014
Lease Income
30 June 2013
330,300
Sale of Mahia Forestry
-
Sundry Income
9,352
Forestry Income
80,400 1,172,093
400
Gain/(Loss) on Sale of Fixed Assets
118,750
Change in Fair Value of Forestry Assets
215,934
Total Income
674,736
400 1,252,893
EXPENDITURE Forestry Expenditure - Chathams
31,334
16,923
-
115,377
Forestry Expenditure - Mahia Operating Costs Administrative Costs
5,310
52,278
26,041
10,333
Directors Fees
-
7,500
7,000
12,500
10,000
5,000
188
3,014
Audit Fees - Group Allocation Management Fees Financing Fees Impairment
956,751
Fair Value Adjustment
12,889
Depreciation
-
231,610
134,635
TOTAL EXPENDITURE
1,281,124
357,560
OPERATING SURPLUS/(DEFICIT)
(606,388)
895,333
6,403
Interest Income
242
(252,112)
(127,261)
NET FINANCE INCOME
(245,708)
(127,019)
SURPLUS/(DEFICIT) FOR THE PERIOD
(852,096)
768,314
Interest Expenditure
Other Comprehensive Income
-
-
(852,096)
TOTAL COMPREHENSIVE INCOME
768,314
CHATHAM ISLANDS ASSET HOLDINGS LIMITED (Consolidated) Statement of Changes in Equity for the Year Ended 30 June 2014 Group
Group
30 June 2014 Equity at the Start of the Period
30 June 2013
(101,514)
Equity transferred for Chatham Islands Forestry
(852,096)
Add Net Profit/(Loss) For The Year
Dividend Paid
-
Equity at the End of the Period
(339,828) 768,314 (530,000)
(953,610)
(101,514)
CHATHAM ISLANDS ASSET HOLDINGS LIMITED (Consolidated) Statement of Financial Position as at 30 June 2014 SHAREHOLDERS EQUITY
-
-
Authorised Capital - 100 Ord. Shares @ $1 each
100
100
Income Appropriation Account
(953,710)
(101,614)
(953,610)
(101,514)
REPRESENTED BY: CURRENT ASSETS ANZ Bank
11,170
Dawson & Associates Trust Account Debtors
-
8,266
198,855
RWT Paid Financial Assets GST
4,532 48,415
9
-
273,399
-
-
234,871
483,433
296,084
597,688
381,754
NON CURRENT ASSETS Forestry Assets Emission Trading Units Property, Plant and Equipment
9,112 1,526,296
2,756,632
2,133,096
3,138,386
2,616,529
3,434,470
Trade and Other Payables
14,499
122,185
GST
27,734
TOTAL ASSETS CURRENT LIABILITIES
-
Chatham Islands Enterprise Trust
3,527,906
3,413,799
TOTAL LIABILITIES
3,570,139
3,535,984
NET ASSETS
(953,610)
(101,514)
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC DEVELO PMENT AND WELLBEING 64
CHATHAM ISLANDS ENTERPRISE TRUST AND SUBSIDIARIES TRADING COMPANIES CHATHAM ISLANDS PORTS LIMITED Statement of Comprehensive Income for the Year Ended 30 June 2014 30 June 2014 30 June 2013 INCOME Operating Income Interest Received Rent Received Sundry Income TOTAL INCOME EXPENDITURE Operating Costs Administrative Costs Audit Fees - Group Allocation Directors Fees Employee Costs Financing Fees Management Fees Write Down of Wharf Loss on Disposal of Property Depreciation TOTAL EXPENDITURE SURPLUS/(DEFICIT) FOR THE PERIOD Grant from Owner (Enterprise Trust) Other Comprehensive Income TOTAL COMPREHENSIVE INCOME
$
$
83,819 1,087 67,660 28,658 181,224
72,322 423 66,646 20,827 160,219
68,509 62,258 7,000 13,000 7,433 302 59,000 199,271 117,231 534,003 (352,779) 352,779 -
51,253 73,300 5,000 13,000 4,407 43 59,000 142,072 348,074 (187,855) 187,855 -
CHATHAM ISLANDS PORTS LIMITED Statement of Changes in Equity for the Year Ended 30 June 2014 30 June 2014 30 June 2013 Equity at the Start of the Period Total Comprehensive Income Equity at the End of the Period
$
2,364,661 2,364,661
2,364,661 2,364,661
CHATHAM ISLANDS PORTS LIMITED Statement of Financial Position as at 30 June 2014 30 June 2014 30 June 2013 SHAREHOLDERS EQUITY Share Capital Retained Earnings Asset Revaluation Reserve
100 263,785 2,100,776 2,364,661
100 263,785 2,100,776 2,364,661
21,343 16,719 2,757 1,169,879 1,210,698
14,564 23,045 4,415 882,100 924,125
NON CURRENT ASSETS Property, Plant and Equipment TOTAL ASSETS
1,196,679 2,407,377
1,487,093 2,411,218
CURRENT LIABILITIES Trade and Other Payables TOTAL LIABILITIES NET ASSETS
42,716 42,716 2,364,661
46,557 46,557 2,364,661
$ REPRESENTED BY: CURRENT ASSETS ANZ Bank Debtors RWT Paid GST Chatham Islands Enterprise Trust
$
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC DEVELO PMENT AND WELLBEING 65
CHATHAM ISLANDS ENTERPRISE TRUST AND SUBSIDIARIES TRADING COMPANIES CHATHAM ISLANDS AIRPORT LIMITED Statement of Comprehensive Income for the Year Ended 30 June 2014 30 June 2014 30 June 2013 INCOME Landing Fees Sundry Income Rent Received Total Income EXPENDITURE Operating Costs Administrative Costs Audit Fees - Group Allocation Directors Fees Management Fees Financing Fees Employee Costs Depreciation TOTAL EXPENDITURE SURPLUS/(DEFICIT) FOR THE PERIOD Grant from Owner (Enterprise Trust)
$
Other Comprehensive Income TOTAL COMPREHENSIVE INCOME
$
123,230 6,739 2,000 131,969
115,561 1,749 500 117,810
116,258 22,022 7,000 13,000 60,000 95 29,237 70,554 318,167 (186,198) 186,198 -
88,439 20,647 5,000 13,000 60,000 31,430 66,940 285,455 (167,645) 167,645 -
CHATHAM ISLANDS AIRPORT LIMITED Statement of Changes in Equity for the Year Ended 30 June 2014 30 June 2014 30 June 2013 Equity at the Start of the Period Total Comprehensive Income Equity at the End of the Period
$
2,214,444 2,214,444
2,214,444 2,214,444
CHATHAM ISLANDS AIRPORT LIMITED Statement of Financial Position as at 30 June 2014 30 June 2014 30 June 2013 SHAREHOLDERS EQUITY Share Capital Retained Earnings Asset Revaluation Reserve Reserves
100 1,210,000 110,000 894,344 2,214,444
100 1,210,000 110,000 894,344 2,214,444
5,205 51,439 4,025 468,440 529,110
3,212 63,839 1,043 397,294 465,388
NON CURRENT ASSETS Property, Plant and Equipment TOTAL ASSETS
1,717,549 2,246,659
1,768,581 2,233,970
CURRENT LIABILITIES Trade and Other Payables TOTAL LIABILITIES NET ASSETS
32,215 32,215 2,214,444
19,526 19,526 2,214,444
$ REPRESENTED BY: CURRENT ASSETS ANZ Bank Debtors GST Chatham Islands Enterprise Trust
$
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC DEVELO PMENT AND WELLBEING 66
CHATHAM ISLANDS ENTERPRISE TRUST AND SUBSIDIARIES TRADING COMPANIES CHATHAM ISLANDS QUOTA HOLDINGS LIMITED Statement of Comprehensive Income for the Year Ended 30 June 2014 30 June 2014 30 June 2013 INCOME Quota Income Interest Received Sundry Income TOTAL INCOME EXPENDITURE Operating Costs Administrative Costs Audit Fees - Group Allocation Directors Fees Financing Fees Interest Expenses Loss on Sale of Quota Shares Management Fees TOTAL EXPENDITURE PROFIT/(LOSS) FOR THE PERIOD
$
Other Comprehensive Income TOTAL COMPREHENSIVE INCOME
1,865,881 2,484 1,868,365
1,403,206 526 1,403,732
173,591 47,365 8,000 10,000 2,368 135,029 14,723 85,000 476,075 1,392,290 1,392,291
155,613 32,320 8,000 10,000 2,914 89,514 85,000 383,361 1,020,371 1,020,371
CHATHAM ISLANDS QUOTA HOLDINGS LIMITED Statement of Changes in Equity for the Year Ended 30 June 2014 30 June 2014 30 June 2013 Equity at the Start of the Period Dividends Paid Total Comprehensive Income Equity at the End of the Period
$
7,479,990 (1,000,000) 1,392,291 7,872,281
6,459,620 1,020,371 7,479,990
CHATHAM ISLANDS QUOTA HOLDINGS LIMITED Statement of Financial Position as at 30 June 2014 30 June 2014 30 June 2013 SHAREHOLDERS EQUITY Share Capital Fish Quota Revaluation Reserve Income Appropriation Account $
100 2,797,607 5,074,573 7,872,281
100 2,797,607 4,682,283 7,479,990
1,003,832 120,948 7,622 623,213 1,755,616
14,847 166,578 818,213 999,638
9,788,205
8,213,760
11,543,821
9,213,399
37,138 106,190 1,415,587 1,558,915
38,759 63,902 363,482 216,902 683,045
2,112,627 2,112,627
1,050,365 1,050,365
3,671,541 7,872,281
1,733,410 7,479,990
REPRESENTED BY: CURRENT ASSETS ANZ Bank & BNZ Bank Debtors Prepayments Chatham Islands Enterprise Trust NON CURRENT ASSETS Intangible Assets TOTAL ASSETS CURRENT LIABILITIES Trade and Other Payables GST Income in Advance BNZ Term Loan TERM LIABILITIES BNZ Term Loan
TOTAL LIABILITIES NET ASSETS
$
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC DEVELO PMENT AND WELLBEING 67
CHATHAM ISLANDS ENTERPRISE TRUST AND SUBSIDIARIES TRADING COMPANIES CHATHAM ISLANDS SHIPPING LIMITED Statement of Comprehensive Income for the Year Ended 30 June 2014 30 June 2014 30 June 2013 INCOME Trading Income Sundry Income Total Income EXPENDITURE Operating Costs Audit Fees - Company Audit Fees - Group Allocation Administrative Costs Bad Debts Employee Costs Financing Fees Directors Fees Impairment Depreciation Management Fees TOTAL EXPENDITURE OPERATING SURPLUS/(DEFICIT)
$
Interest Income Interest Expenditure NET FINANCE INCOM E SURPLUS/(DEFICIT) FOR THE PERIOD Other Comprehensive Income TOTAL COMPREHENSIVE INCOME
$
3,119,770 23,920 3,143,690
1,999,955 87,347 2,087,302
2,633,391 4,539 8,000 245,936 3,848 173,840 4,227 24,000 47,568 25,690 3,171,039 (27,350) 368 (16,658) (16,290) (43,640) (43,640)
2,098,003 12,000 3,000 306,687 19,073 3,059 24,000 400,000 37,156 25,000 2,927,978 (840,675) (840,675) (840,675)
CHATHAM ISLANDS SHIPPING LIMITED Statement of Changes in Equity for the Year Ended 30 June 2014 Equity at the Start of the Period Comprehensive Income
(40,675)
Add Net Surplus/(Deficit) For The Year
(43,640) (84,315)
Share Capital Equity at the End of the Period
$
(840,675) 800,000 (40,675)
CHATHAM ISLANDS SHIPPING LIMITED Statement of Financial Position as at 30 June 2014 30 June 2014 30 June 2013 SHAREHOLDERS EQUITY Share Capital Retained Earnings
800,000 (884,315) (84,315)
800,000 (840,675) (40,675)
251,570 21,000 121 328,574 (4,425) 20,000 52,781 669,622
127,667 74,550 346,428 20,000 568,645
84,558
89,143
TOTAL ASSETS
754,179
657,788
CURRENT LIABILITIES Trade and Other Payables GST Chatham Islands Enterprise Trust TOTAL LIABILITIES NET ASSETS
488,494 350,000 838,494 (84,315)
438,648 9,815 250,000 698,463 (40,675)
$ REPRESENTED BY: CURRENT ASSETS ANZ Bank Stock on Hand RWT Paid Debtors Provision for Impaired Debtors Bonds GST NON CURRENT ASSETS Property, Plant and Equipment
$
The Statement of Accounting Policies and notes form an integral part of, and should be read in conjunction with these financial statements
PROMOTING ECONOMIC DEVELO PMENT AND WELLBEING 68
