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TAKE A LOOK AT OUR FUTURE...
ANNUAL REPORT 2009
NEW ZEALAND’S
A N N UA L R E PO RT 2 0 0 9 : 1
NEW ZEALAND’S CARGO
GATEWAY TO THE WORLD
SEE STORY PAGE 2
Photo shows potential expansion of Port of Tauranga’s infrastructure
CO NT
N T EN TS
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N EW ZEAL AND’ S GATEWAY TO THE WORLD
EX PANDABLE CAPACIT Y - GROWING WITH THE FUTURE
A NEW CL ASS OF VE SSEL SIZE IS ON OUR RADAR
RES ULTS I N BR I EF
HIGHLI GHTS
CHAIR MAN’ S R EPORT
BOAR D OF DI R ECTORS
CH IEF EX EC UTIVE’ S REVIE W
SE NI O R MANAGEME NT TEAM
CUSTOMER S
OUR
CUSTOMERS
2 : AN N UAL REPORT 2009
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O U R PA RT NE R S
STA FF
O U R STAFF
PO
SU STA I NA BI L I T Y R E P
O RT
PO
CO R P
O R AT E G OV E R NA NCE STAT E M E NT
P O RT O F T H E D I R E CTO R S TO T H E SH A R E H O L DE
DERS
R E PO
P O RT
AU D I T R E PO
FI NA NCI A L STAT E M E NTS
ON
STAT U TO RY I NFO R M AT I ON
P E R AT I O NA L FI V E Y E A R SU M M A RY
FI NA NCI A L A ND O PE
P O R AT E ST R U CTU
CT U R E
CO R PO
CO M PA NY D I R E CTO RY
A NEW CLASS OF VESSEL
SIZE IS ON OUR RADAR
SEE STORY PAGE 6
EXPANDABLE
CAPACITY - GROWING
WITH THE FUTURE
SEE STORY PAGE 4
NEW ZEALAND’S
A N N UA L R E PO RT 2 0 0 9 : 1
P O RT FO R T HE FUT U R E - N E W Z E A L A N D ’ S CA R G O G AT E WAY TO T H E WO R L D
NEW ZEALAND’S CARGO
GATEWAY TO THE WORLD
NORTHPORT
METROPORT
AUCKLAND
PORT OF TAURANGA
PORT OF TAURANGA IS THE
NATURAL GATEWAY TO AND FROM
INTERNATIONAL MARKETS FOR MANY
OF NEW ZEALAND’S BUSINESSES.
OUR LOCATION IS CENTRAL TO KEY
EXPORT COMMODITY SOURCES, AND
WE HAVE DIRECT AND DEDICATED
ACCESS TO NEW ZEALAND’S
LARGEST IMPORT MARKET.
With an annual cargo
throughput of more than
13 million tonnes, Port of
Tauranga is New Zealand’s
largest port.
P O RT FO R T H E FU T U R E - N E W Z E A L A N D ’ S CA R G O G AT E WAY TO T H E WO RLD
PORT OF TAURANGA IS NEW ZEALAND’S PORT FOR THE FUTURE. WE HAVE
THE LOCATION, THE STRATEGIC PARTNERSHIPS WITH OUR CUSTOMERS
AND SUPPLIERS, THE CAPACITY TO EXPAND OUR INFRASTRUCTURE, AND
UNRIVALLED SEA, ROAD AND RAIL CONNECTIONS.
IN THE FUTURE, UP TO
650,000 TEUS EACH
WAY PER ANNUM
CAN BE RAILED VIA
THE TAURANGA TO
AUCKLAND RAIL LINK
METROPORT
increased our capacity to handle
conditions and growing commodity
MetroPort offers direct rail
expanding volumes of forest
demand. The company works
access from Tauranga to the
product exports, as well as growth
closely with customers to manage
Auckland consumer market. This
in manufacturing and other export
future needs.
dedicated rail link, operated by
sectors.
KiwiRail, bypasses Auckland’s heavily
With 50 hectares of available land,
congested roads. In the future, this
Northport is well positioned for
rail link will give Port of Tauranga
further growth. The proposed
the ability to handle up to 12 trains
designation of a Northland rail
of 150 TEUs (twenty foot equivalent
corridor presents numerous new
units) per day.
opportunities.
Efficient turnaround of cargo is
facilitated with state of the art IT
C3 – COMPLETE CARGO CARE
systems determining arrival and
C3 Limited, a strategic partner of
departure times. Qualified staff are
Port of Tauranga, operates in 13
available to assist our customers
ports throughout New Zealand.
around the clock.
C3’s many years of experience in
ROAD AND RAIL LINKS
In addition to investment in increased
capacity on rail connections, the
Port will benefit from improvements
to roading infrastructure in the
Bay of Plenty. The duplication of
the Tauranga harbour bridge and
dedicated motorway access ramps to
the Tauranga Container Terminal will
enable the terminal to expand without
creating bottlenecks.
NORTHPORT
for a range of import and export
Northport, Port of Tauranga’s joint
requirements allows it to take
The Tauranga Eastern Arterial Project
is being fast-tracked and will create
a four lane motorway bypassing Te
Puke. This will significantly reduce
travel time and transportation costs
venture at Marsden Point, has
advantage of changing industry
to the port from the east.
providing cargo handling solutions
A N N UA L R E PO RT 2 0 0 9 : 3
P O RT FO R T HE FUT U R E - EX PA N DA B L E CA PAC I T Y - G R OW I N G W I T H T H E FU T U R E
EXPANDABLE CAPACITY GROWING WITH THE FUTURE
Photo shows future planned expansion of the Tauranga Container Terminal
PORT OF TAURANGA IS POISED TO
EXPAND CAPACITY TO ACCOMMODATE
OUR CUSTOMERS’ FUTURE NEEDS, AT A
RELATIVELY LOW COST.
THE ADDITION OF OUR FIFTH LIEBHERR
SHIP-TO-SHORE GANTRY CRANE EQUIPS
THE PORT TO SERVICE LARGER VESSELS
ANTICIPATED IN THE FUTURE.
P O RT FO R T H E FU T U R E - EX PA N DA B L E CA PAC I T Y - G R OW I N G W I T H T H E FUTURE
PORT OF TAURANGA’S KEY STRENGTH LIES IN OUR ABILITY TO GROW TO MEET
CUSTOMER REQUIREMENTS AND MARKET DEMANDS. WE HAVE THE LAND
HOLDINGS TO EXPAND, AND THE INTEGRITY, INNOVATION AND COMMITMENT
TO MEET OUR CUSTOMERS’ FUTURE NEEDS.
WITH RELATIVELY
LOW CAPITAL
EXPENDITURE MORE
THAN ONE MILLION
TEUS PER ANNUM
CAN BE HANDLED
AT THE TAURANGA
CONTAINER TERMINAL
TAURANGA QUAYSIDE
The Port has the ability to
extend the quay length at the
Tauranga Container Terminal
from 600 metres to 1,155
metres as required. Currently
the terminal has 21 hectares
that can be quickly sealed, at
relatively low cost, to become
part of the terminal operation.
With the purchase of additional
gantry cranes and associated
plant, the terminal will be able
to handle more than one million
TEUs per annum without the
need to move to a more intensive
high-stack gantry operation.
The terminal is served by
two rail sidings, which can be
duplicated. With the addition
of rail-mounted gantry cranes,
the terminal will then be able to
handle ten times the volumes
currently moved by rail.
MOUNT MAUNGANUI QUAYSIDE
The current 2,060 metres of
quay length can be extended
to the south by a further 1,000
metres, to handle increased bulk
and liquid cargoes.
LAND ACQUISITIONS
The Port has purchased 13.7
hectares of land since April 2008
to bring total land holdings to
185 hectares. This makes Port of
Tauranga the largest New Zealand
port in terms of land area.
With the increase in forestry
exports, the Port is sealing land
recently acquired and looking to
intensify storage methods to
meet the expected log volumes
of five million tonnes per annum.
The Port also has eight hectares
of vacant land in Totara Street
to cater for the expected
increase in bulk and liquid
cargoes at the Mount Maunganui
wharves.
A N N UA L R E PO RT 2 0 0 9 : 5
P O RT FO R T HE FUT U R E - A N E W CL A SS O F V E S S E L S I Z E I S O N O U R R A DA R
A NEW CLASS OF VESSEL SIZE
IS ON OUR RADAR
Existing channel deepened
to 16.0m inner & 17.4m outer
Widened channel
No change
THE PORT IS SEEKING
APPROVAL TO DEEPEN
THE CHANNEL FROM 11.7
METRES TO 14.5 METRES
AT LOW WATER.
P O RT FO R T H E FU T U R E - A N E W C L A S S O F V E S S E L S I Z E I S O N O U R RA DA R
CARGO SHIPMENTS ARE INCREASING IN SCALE AND PORT OF TAURANGA
IS IDEALLY POSITIONED TO ACCOMMODATE LARGER SHIPS THROUGH OUR
STRONG BALANCE SHEET AND READILY EXPANDABLE INFRASTRUCTURE.
THE DREDGING
APPLICATION
PROVIDES FOR
INCREMENTAL
DREDGING SO
THE PORT CAN
RESPOND TO THE
ANTICIPATED
INCREASE IN SIZE
OF SHIPS
CHANNEL DEEPENING
INCREMENTAL DREDGING
competitiveness of New Zealand’s
Port of Tauranga has applied for
The Port’s dredging application
exporters and provide lower freight
resource consents to widen and
provides for the work to be
costs for imports.
deepen Tauranga harbour’s shipping
carried out in stages to enable
Port of Tauranga is also working
channels to accommodate larger
the Port to respond commercially
with KiwiRail to ensure sufficient rail
vessels.
to the anticipated progressive
capacity to deal with the turnaround
The dredging application to
Environment Bay of Plenty seeks
approval to deepen channels
between 3.1 and 3.3 metres, to
accommodate larger vessels of up
implementation of larger vessels.
The material to be dredged is
predominantly clean sand and
markets are being explored for this
resource.
of larger volumes of cargoes.
The Port’s investment in expanding
our fleet of gantry cranes and
straddle carriers will also ensure
efficient servicing of larger vessels.
to 7,000 TEUs, with a draught of
LARGER SHIPS
Our new Liebherr gantry crane –
14.5 metres and 347 metres length.
Larger ships, both containerised
which has twin-lift capability and is
Ships of this size are expected to
and bulk, will have relatively higher
large enough to service ships up to
dominate shipping services for the
fuel efficiency and lower operating
18 containers wide – increases the
next 15 to 20 years.
costs per unit. This will enhance the
Port’s fleet of gantry cranes to five.
A N N UA L R E PO RT 2 0 0 9 : 7
P O RT F O R T HE F U T U R E - R E S U LTS I N B R I E F
OUR VISION
To be New Zealand’s preferred cargo gateway
OUR MISSION STATEMENT
Leading through innovation and commitment
OUR VALUES
Integrity, Innovation, Communication, Teamwork
FOR US SOCIAL RESPONSIBILITY IS:
Ensuring our strategic and operational decisions take into account our environmental
responsibilities and the aspirations of our shareholders, the community, and our staff.
Photo shows future northern expansion of Tauranga wharves with additional cranes
RESULTS IN BRIEF
Year
2009
$000
Year
2008
$000
143,619
148,808
45,185
42,117
TOTAL ASSETS
910,447
895,426
TOTAL EQUITY
643,057
639,210
70.6
71.4
33,509
44,231
4.80
4.77
7.0
6.6
13,458
13,525
546,521
582,072
REVENUE
SURPLUS AFTER TAXATION
SHAREHOLDERS’ EQUITY (%)
DIVIDENDS PAID
NET ASSET BACKING PER SHARE ($)
RETURN ON AVERAGE EQUITY (%)*
CARGO THROUGHPUT (000 TONNES)
CONTAINERS (TEUS)
The Board approved a final dividend of 18.0 cents per share ($24.1 million) after year end payable on 2 October 2009.
* Assets were revalued by $189.2 million effective 30 June 2004 and $228.0 million effective 30 June 2007.
P O RT FO R T H E FU T U R E - H I G H L I G HTS
HIGHLIGHTS
Record Group profit of $45.185 million.
One Lost Time Injury (LTI) during the year.
Entering into a long term operating agreement with Carter Holt Harvey Lodestar.
Purchase of 2.6 hectares of Mount Maunganui wharf store and also 1.8 hectares of land within the
Mount Maunganui wharf area.
Increase of 27% in log exports.
Increase of 24% in dairy exports.
A record year of cruise ships with 56 visits, up from 40 in 2008.
Erection of new Liebherr gantry crane at the Tauranga Container Terminal, commissioned July 2009.
Sealing of hardstanding at the Tauranga Container Terminal, increasing terminal area by 1.3 hectares.
Increase in productivity at the Tauranga Container Terminal.
CMA CGM Panama fortnightly service began calling in July 2008.
Pacifica weekly coastal service began calling in October 2008.
Lodged application for dredging consent to dredge channels to 14.5 metres draught at low water.
Port of Tauranga Limited nominated as one of three finalists for New Zealand Business of the Year in
Deloitte’s Management Magazine Top 200 Companies Award.
12
INTERNATIONAL CARGO BY PORT FOR YEAR TO 30 JUNE 2009
(Source: Statistics New Zealand)
10
EXPORT
IMPORT
6
4
2
WESTPORT
GREYMOUTH
NZ VARIOUS
PICTON
TAHAROA
TIMARU
GISBORNE
NELSON
BLUFF
DUNEDIN
WELLINGTON
NAPIER
NEW PLYMOUTH
LYTTELTON
AUCKLAND
WHANGAREI
0
TAURANGA
MILLIONS OF TONNES
8
A N N UA L R E PO RT 2 0 0 9 : 9
P O RT FO R T HE FUT U R E - C H A I R M A N ’ S R E P O RT
“INVESTMENT IN
LAND, ROAD, RAIL AND
INFRASTRUCTURE POSITIONS
US WELL FOR THE FUTURE”
CHAIRMAN’S REPORT
JOHN PARKER
CHAIRMAN
Given the parlous
state of world financial
markets over the
past year, to be able
to report a profit is
pleasing and to be able
to report an increase
in profit, very pleasing
indeed.
FINANCIAL PERFORMANCE
to $143.619 million, with container
The financial market collapse
throughput down 4% to 546,521
caused a commodity boom to turn
TEUs and total trade decreasing to
to bust and for Port of Tauranga,
13.458 million tonnes.
meant considerable change to
The Chief Executive’s report will
trading patterns with overcapacity,
detail changes in cargoes but the
especially in container shipping.
positive highlight was a substantial
Net profit after tax for the year
increase in dairy and log exports.
ended 30 June 2009 was $45.185
The Company’s balance sheet
million – an increase of $3.068 million
remains very strong, with a debt/
or 7.3% on last year. Total operating
debt plus equity ratio of 29.4%
revenue fell by 3.5% on last year
after payment of $33.509 million in
P O RT FO R T H E FU T U R E - C H A I R MA N’S REPO RT
dividends and investment of $38.533
INDUSTRY ENVIRONMENT
million in capital expenditure. In the
New Zealand is a country of difficult
terrain with a small population so
internal transport infrastructure
will always be a high cost burden.
Prioritising investment on
economically important routes is
therefore more important to New
Zealand than most countries. Ports
are a critical part of the transport
infrastructure and especially so
given the high volume of New
Zealand’s imports and exports per
capita, our distance from markets
and the fact that our major exports
are relatively low value per unit of
weight. Port efficiency and the
contribution to or burden they
impose on infrastructure – be it
internal to New Zealand or shipping
costs – is important.
current climate, we are very pleased
to retain a conservative balance
sheet and to have bank facilities
negotiated at very favourable rates
prior to the current credit crisis and
running through to December 2010.
We have commenced discussions
with our bankers and are confident
of securing new debt facilities with
effect from 30 June 2010.
DIVIDEND
Directors have declared a final
dividend of 18 cents per share, which
on top of the interim dividend of
nine cents brings the total for the
year to 27 cents. Last year, the
comparative figures were 16 cents
final and nine cents interim. This
year’s total dividend is 8% higher
than last year.
It is for these reasons that this
Company continues to make a
public stand on the issue of port
rationalisation. Newer and larger
container ships want to begin
servicing New Zealand but require
the expenditure of hundreds
of millions of dollars on the
infrastructure to accommodate
them. That cost and the
requirements of these vessels to
make at most two New Zealand port
calls and to discharge and load big
tonnages quickly means that New
Zealand cannot afford or service
more than two such ports. A port
hierarchy must develop where other
ports feed in cargoes to the two
primary ports by road, rail and sea.
The prize for shippers in doing
this is substantially lower costs.
If port owners don’t move, falling
revenues and market forces will
dictate change. The recent move by
Fonterra to start consolidating their
exports on fewer ports is part of
that process.
A N N UA L R E PO RT 2 0 0 9 : 1 1
P ORT FOR T HE FUT U R E - C H A I R M A N ’ S R E P O RT
DIRECTORS
FUTURE
Messrs Bill Baylis and Bill
Capamagian retire at the Annual
The economic climate of 2010
remains uncertain and likely to bring
Meeting in accordance with the
Company’s constitution and offer
themselves for re-election.
considerable challenges. Given our
strong balance sheet, operating
efficiency and the Port’s diverse
STAFF
cargoes, we are well-placed to ride
out the uncertain short term and
In last years Chairman’s report, I
said “Another praiseworthy effort
participate strongly in any export led
recovery to the economy.
from our staff. In the face of
considerable global financial turmoil,
they have, with the minimum of fuss,
Looking forward, the growth in
vessel size, combined with market
kept their eye on the key drivers
of the business, providing a cost
efficient and customer focussed
service that continues to attract
profitable new business.”
I couldn’t say it better for the year
under review, except to add that it
has been even more difficult.
Management continue to exercise
tight control on operating costs
while actively pursuing profitable
new business opportunities.
concentration among shipping lines,
means that fewer large vessels
will call at fewer ports. This will
drive specialisation into hub and
spoke feeder ports and makes port
rationalisation even more urgent.
Port of Tauranga is New Zealand’s
logical Port for the Future. We have
the land, much of the infrastructure,
balance sheet capacity and can
accommodate larger vessels at a
much lower incremental cost than
other New Zealand ports.
John Parker
CHAIRMAN
P O RT FO R T H E FU T U R E - B OA R D OF DI RECTO RS
BOARD OF DIRECTORS
J S PARKER
A W BAYLIS
A W CAPAM AGI AN
J M CRONIN
B Ag Sc, Chairman
INDEPENDENT DIRECTOR
MCom (1st Class Honours),
FCA, FNZIM, AFInstD
CA
MNZM, JP, CA, AMInstD
John Parker is Chairman
of Northport Limited and
Director of C3 Limited
and New Zealand Farming
Systems Uruguay Limited.
Mr Parker also chairs the
Nomination Committee
and joined the Board of
Port of Tauranga Limited in
June 1996.
Bill Baylis is Chairman of
Real Journeys Limited, a
non-executive Director
of Blackhead Quarries
Limited and a number of
related companies. He
has broad governance
experience over a wide
range of industries. Mr
Baylis chairs the Audit
Committee and joined the
Board in February 2006.
As a former Deputy
Managing Director for
Owens Group Limited, Bill
Capamagian has a long
period of shipping and
transport experience. Bill
has spent most of his
working life in Tauranga.
He joined the Board in
August 1994.
John Cronin, an
experienced company
director, is Chairman of
the Bay of Plenty Regional
Council (Environment Bay
of Plenty), and a Director
of Attach Systems Limited,
Design Concepts Limited
and Piccadilly Investments
Limited. John joined the
Board in August 2002.
D A PILKIN GTON
M J SMITH
S I R DRY DEN S PR I N G
BSc, BE, GradDip Dairy
Science & Technology
LLB
DSc (Hon)
David Pilkington was a
member of Fonterra’s
senior executive team and
now holds Directorships
in Ballance Agri-Nutrients
Limited, Douglas
Pharmaceuticals Limited,
Prevar Limited, Rangatira
Limited, Ruapehu Alpine
Lifts Limited and ZESPRI
Group Limited. He has
a strong background in
marketing, international
business and supply chain
logistics. Mr Pilkington
joined the Board in July
2005.
A Tauranga lawyer,
Michael Smith is Chairman
of Quayside Group of
Companies. He is an
experienced company
director with an extensive
corporate and commercial
legal background. Mr
Smith chairs the
Remuneration Committee
and joined the Board in
August 2001.
Sir Dryden Spring is
Chairman of the ANZ
National Bank Limited,
and is also a Director of
Fletcher Building Limited,
Northport Limited and Sky
City Entertainment Group
Limited. He joined the
Board in April 2004.
A N N UA L R E PO RT 2 0 0 9 : 1 3
P O RT FO R T HE FUT U R E - C H I E F EX E C U T I V E ’ S R EV I E W
“OUR EXPANDABLE
CAPACITY IS THE KEY
TO FUTURE SUCCESS”
CHIEF EXECUTIVE’S REVIEW
MARK CAIRNS
CHIEF EXECUTIVE
As your Chief
Executive, I am proud
to report on another
solid Company
performance for
the year, against a
backdrop of negative
economic headlines.
its market leadership position as
the Company. The 7% increase in
confirmed by a number of measures:
earnings on reduced trade and
trade volume, productivity and
revenue is a very satisfactory
profitability. The latest Statistics
result in the current financial
New Zealand data confirms Port
climate. This increase in earnings
of Tauranga as New Zealand’s
can be attributed to: a general
largest port, with our market share
reduction in costs across the
increasing further, where we now
board; improvement in dairy and log
handle some 56% more international
exports; increased property income
cargo than any other port (and
from the additional 13.7 hectares
The business environment has
236% more international exports).
of land purchased over the last 17
remained intensely competitive
The Chairman has commented
months; and lower interest costs
and the Company has retained
on the financial performance of
and a lower corporate tax rate.
P O RT FO R T H E FU T U R E - C H I E F EX E C U T I V E ’ S REV I EW
OPERATIONS
Total trade for the year was down
slightly at 13.458 million tonnes – a
decrease of 66,346 tonnes (or 0.5%)
on the previous year. Noteworthy
variances in trade were as follows:
log exports increasing 27%; dairy
exports increasing 24%; meat
exports increasing 17%; and coal
imports increasing 68% (off a low
FY08 base). Negative variances
included: processed forestry exports
decreasing 5%; kiwifruit exports
decreasing 4%; palm kernel and
grain imports decreasing 10%; steel
exports decreasing 6%; oil imports
decreasing 6%; and fertiliser base
imports decreasing 23%.
CONTAINERS
With the drop-off in imports
associated with the recession,
container volumes decreased 6%
during the period. Over the last ten
years, container throughput has
compounded at an average growth
rate of 19.2% per annum.
The Chairman has mentioned
the Organisation for Economic
Co-operation and Development
(OECD) report highlighting the cost
disadvantages that our importers
and exporters face. In 2006, New
Zealand’s level of labour productivity
was ranked 22nd out of 30 in the
OECD. The tyranny of distance is
something that port companies
must strive to overcome through
boosting productivity both within the
port gates and also with efficient
intermodal connections outside the
port gate. We are proud to have
increased the Company’s already
high level of productivity in the
container terminal to an average
net crane rate of 33.8 moves per
hour (as measured by the Australian
Productivity Commission). Recent
independent benchmarking by
Rockpoint Corporate Finance
shows the Port to be some 25%
more productive than any other
Australasian port. Following our
recent 1.3 hectare expansion to the
terminal pavement area, we have
seen a further 4% improvement
over the second half of the financial
year, where our net crane rate has
averaged 35.3 moves per hour. Our
productive capacity will be further
enhanced following the recent
commissioning of our fifth Liebherr
gantry crane in July this year.
The Chairman has already touched
on port reform in New Zealand and
one strong driver of reform going
forward will be the rapidly increasing
size of vessels and the cascading
of larger container vessels into our
waters. We note Fonterra’s recent
calls for New Zealand to ready itself
for container vessels in the 6,000
to 7,000 TEU (twenty foot equivalent
unit) range, as soon as practical.
On that note, we have lodged our
resource consent application to
be able to widen and dredge our
harbour channels and sitting basins
to provide for 14.5 metres draught
(all tides). Once these resource
consents are secured, dredging
could be initiated in a timely manner,
as and when required by market
demand.
A N N UA L R E PO RT 2 0 0 9 : 1 5
P O RT FO R T HE FUT U R E - C H I E F EX E C U T I V E ’ S R EV I E W
We have significant capacity for
As an example, the average travel
total strategic land holdings to
future growth without the need
time savings on this new link of
185 hectares (72 hectares for the
for expensive high stacking gantry
24 minutes (return trip) could see
container terminal alone), further
systems or further reclamation.
trucks completing four journeys
future-proofing our capacity to
Our costs to cater for these larger
a day to the port instead of the
provide for continued growth in bulk
container vessels are lower than
current three.
as well as containerised cargoes.
other ports and we have sufficient
Rail continues to be an integral
balance sheet capacity to fund
ASSOCIATE COMPANIES
part of the Port of Tauranga’s
these projects.
business model, with approximately
ROAD AND RAIL
Port of Tauranga enjoys excellent
road and rail links, with a significant
additional route capacity available
in rail.
40% of all cargo moving into and
out of the port by rail. We are
working with KiwiRail to increase
capacity and enhance service levels
on the MetroPort Auckland rail
operation. The recent introduction
We had a stronger contribution from
Associate Companies with income up
20% or $0.85 million on last year.
Northport Limited’s earnings
were up 52% or $1.770 million on
last year. We continue to regard
Northport as a key strategic asset,
anticipating long-term growth and
The $250 million Harbour Link
of 60 new generation (IM) wagons,
roading project is on track to be
and the construction of three
completed earlier than scheduled
passing loop extensions doubling
and will be opened before the end
the route capacity on the Tauranga
of the year. We also welcome
to Hamilton line are tangible
Earnings for C3 Limited (previously
the Minister of Transport’s
examples of this enduring business
Toll Owens Limited) were up slightly
recent announcement of a tolling
partnership. These new IM type
at 1% or $0.034 million on last
proposal that could see the fast-
wagons can take the equivalent of
year. Both Northport Limited and
tracking of the Tauranga Eastern
three TEUs whereas in the past, the
C3 Limited are well positioned to
Arterial Project, with construction
older UK wagons could only carry
participate in increased forestry
commencing as early as next year.
two TEUs. The trains previously
exports.
This arterial will be New Zealand’s
carried 94 TEUs and the new wagons
MetroBox Auckland Limited, which
largest four lane roading project
have seen this increase to 106 TEUs
operates a container handling
and the completion of this vital link
per train.
operation at MetroPort, has
will reduce freight costs and provide
we welcome the commencement
of the designation process for the
Marsden Point rail spur line.
returned to a modest profitability
further supply chain productivity
LAND
over the last two years and meets
improvements for our importers
We have acquired a further 13.7
the Group’s strategic objective of
and exporters – the tradeable
hectares of land over the last
developing a “freight village” in South
portion of New Zealand’s economy.
17 months which now brings our
Auckland.
P O RT FO R T H E FU T U R E - C H I E F EX E C U T I V E ’ S REV I EW
SAFETY
Our commitment to workplace
safety is a daily practice at the Port
and I am pleased to report another
strong improvement in safety
performance with the Company
incurring only one lost time injury
for the year, reducing our Lost
Time Injury Frequency Rate (LTIFR)
by 72% to 3.5 (per million hours
exposure). This is still considered
one accident too many, but in our
hazardous working environment,
this is a significant achievement
and excellent progress towards
our goal of having an accident-free
workplace.
We are also pleased that Accident
Compensation Corporation (ACC)
has ranked the Port of Tauranga
as the best performing port in New
Zealand in terms of claims history,
which we believe is testament to the
Port-wide Users’ Health and Safety
Forum.
STAFF
Most Chief Executives would say the
strength of an organisation is in its
people. Our Company continues to
rely on the accumulated expertise of
a long-serving complement of staff
and I consider that I am privileged to
lead a special team.
Low staff turnover over many years
has resulted in a very strong taskfocussed culture which drives both
productivity and the innovation,
which are the Company’s hallmarks.
Our staff service profile is worth
highlighting – there would not be
many companies who could boast
such a large number of loyal staff.
A third of our staff has had more
than 20 years’ service, 10% have in
excess of 30 years’ service, and two
individuals have even been with the
1
Company for more than 40 years.
This provides a great resource
to pass on the knowledge and
As New Zealand’s largest port, it is
our intention to retain that position
and to grow accordingly. We have
experience to our bright, young
new staff.
secured ample land holdings to be
able to capitalise on our natural
geographic potential. The road
SUSTAINABILITY
The Company continues to strive to
build strong enduring relationships
and rail infrastructure necessary
to support that growth is being
put into place. Our business
with customers, stakeholders,
shareholders, staff and the
community. You will find familiar
fundamentals remain sound and our
relative competitive advantages are
strengthening – the Company is well
information, appropriately updated
in the sustainability section of this
poised to be New Zealand’s Port for
the Future.
report.
THE FUTURE
Port of Tauranga remains committed
to treating every customer as a
valued partner with whom it works
to find shipping solutions that are
efficient, innovative, and profitable
for the importer/exporter and the
Port Company.
The Company’s positioning
strategies have insulated the
Company to a degree and our
increasingly diverse trade mix
is relatively defensive. On that
note, it is pleasing to see a strong
increase in forestry exports over
the last six months, with sustained
demand from China. MAF have
recently published some excellent
forecasting on Central North Island
Whilst the economy looks to have
found a floor and many positive
signs are emerging, there remains
significant uncertainty to the
outlook and speed/shape of
any recovery. In particular, the
persistently strong New Zealand
dollar drags on the economic
outlook, with the dollar having
risen more than 35% since March.
It remains difficult to provide
guidance for the coming year, but
at this stage we remain confident
of maintaining a full year earnings
result similar to last year’s.
I sincerely thank our business
partners, staff and Directors who
have helped us achieve another
record result, which is a tribute to all
who were involved.
wood availability, based on a mixture
of assumptions: large-scale forest
owners harvest intentions; smallscale forest owners harvest by age
class; and yields by forest type.1
The key takeouts from this analysis
Mark Cairns
CHIEF EXECUTIVE
suggest it is time to start planning
to provide port infrastructure to
handle annual export volumes of
five million tonnes over the medium
term. This has been confirmed in
recent discussions with our forestry
exporter customers.
MAF. http://www.maf.govt.nz/mafnet/publications/wood-availability/central-north-island
A N N UA L R E PO RT 2 0 0 9 : 1 7
P O RT FO R T HE FUT U R E - S E N I O R M A N AG E M E N T T E A M
SENIOR MANAGEMENT TEAM
MARK CAIRNS
CHIEF EXECUTIVE
STEVEN GRAY
CHIEF FINANCIAL OFFICER
GRAEME MARSHALL
COMMERCIAL MANAGER
TERRY JAMES
CORPORATE SERVICES MANAGER
TONY REYNISH
PROPERTY MANAGER
Photo taken on the new Tauranga Harbour Bridge constructed by Fletcher Construction. Opened September 2009.
P O RT FO R T H E FU T U R E - O U R C U STO MERS
KIWIRAIL
KiwiRail is investing in
rail infrastructure and
rolling stock to ensure
it can meet future
demand from customers
choosing rail.
“Our investment underlines the
Chief Executive Jim Quinn says
KiwiRail is committed to building
capacity where customers see rail
as an efficient option. He says the
Auckland-Tauranga rail corridor,
part of the “Golden Triangle” with
Hamilton, is a good example.
current 106 20 foot equivalent
Up to 32 trains a day run on the line
between Auckland and Tauranga and
the associated forestry products’
line to Kawerau. The cargoes include
containerised dairy exports as well
as steel, coal and forest products.
Jim says projected freight growth
of up to 75% over the next 20 years,
and the prospect of increased
capacity requirements from new
larger ships, will put pressure on
transport corridors.
importance of major ports to New
Zealand’s economic future,” he says.
Improvements on the Golden Triangle
route will see an increase in the
length of trains serving Tauranga
maintenance equipment will be
deployed on the national network.
KiwiRail is also introducing 20 new,
more powerful and fuel efficient
locomotives nationally.
the next two years.
In October last year, 60 new
generation wagons were
commissioned for the MetroPort
service, increasing capacity from
two to three 20 foot containers per
KiwiRail is effectively doubling the
wagon, or one 40 foot and one 20
capacity of the Hamilton-Tauranga
foot container.
line by increasing crossing loops.
Port of Tauranga and KiwiRail have
entered a headroom agreement to
ensure sufficient capacity at the
and MetroPort Auckland from the
containers (TEUs) to 150 TEUs within
Jim says two new and two extended
loops will increase capacity from
two trains an hour in each direction
to four trains. One 250 metre
extension near Morrinsville has been
completed and the others will be
finished by early 2011.
He says as well as increasing
peak cargo season. The agreement
guarantees availability of up to 12
trains of 150 TEUs per day.
Approximately 40% of imports and
exports through Port of Tauranga
travel on rail.
capacity, KiwiRail is working on
reliability of the line, much of which
dates back to the 1930s. Before the
end of 2009, new $23 million ballast
A N N UA L R E PO RT 2 0 0 9 : 1 9
P O RT FO R T HE FUT U R E - O U R C U STO M E R S
CARTER HOLT HARVEY LODESTAR
Carter Holt Harvey
Lodestar has banked
on Tauranga being its
Port for the Future
through a long-term
operating agreement
signed in early 2009.
The agreement cements the long
and productive relationship between
Carter Holt Harvey (CHH) and Port of
Tauranga, dating back to the 1950s.
CHH Lodestar’s Manager-Integrated
Solutions David Kriel says the
agreement helps create operational
efficiencies for Carter Holt Harvey’s
pulp, paper, cartonboard and wood
product exports from its Central
North Island mills, as well as its
imports of raw materials.
“It allows us to optimise our
integrated supply chain,” says David.
“It has given us an opportunity to
consolidate our Central North Island
volumes.”
“We believe that the Port of
Tauranga is strategically important,
not only to CHH Lodestar, but to New
Zealand business in general,” he says.
Zealand’s most strategic ports in the
Carter Holt Harvey’s logistics
solutions arm, Lodestar, has leased
key facilities in prime wharf locations
at Mount Maunganui and Sulphur
Point. CHH Lodestar has agreed
to export an annual cargo volume
through the Port. The agreement
also includes the sale to Port of
Tauranga of a leasehold interest in a
2.6 hectare Mount Maunganui wharf
store and 1.8 hectares of freehold
land within the wharf area.
half a dozen sites to one prime
David says the agreement has
removed the transactional nature
of the relationship with the Port and
strengthened a mutually beneficial
strategic partnership.
“We’re a significant user of port
services and we’ve always worked
well together, but the agreement
means that we can get on with
building our businesses,” says
David. “Tauranga will be one of New
future, there’s no doubt about that.”
CHH Lodestar has been able to
consolidate its pulp storage from
position on the wharf with direct
rail access. This consolidation has
allowed CHH to substantially reduce
its pulp warehousing footprint, with
the associated flow-on logistics
benefits.
“At this time of flux in the shipping
world, with services coming and
going, we have put a peg in the sand.
All of our service providers can now
plan around where the majority of
our cargo will exit New Zealand,” says
David.
“Over time, we believe this strategy
and the consolidation of our business
at Tauranga will allow us to become
even leaner, with a sustainable,
logical distribution network. This
will allow CHH Lodestar to deliver
an improved, stable service to our
customers,” he says.
P O RT FO R T H E FU T U R E - O U R C U STO MERS
FONTERRA
Key Port of Tauranga
customer Fonterra,
which controls more
than a third of the
world’s dairy trade,
welcomes the moves to
prepare for the arrival
of bigger ships in New
Zealand waters.
Fonterra’s General Manager Supply
Chain Strategy Nigel Jones says New
Zealand must urgently upgrade port
and transport capacity to improve
productivity and enable bigger ships
to start calling in the next few years.
“The current work that’s under way
at Port of Tauranga in infrastructure
development and planning for
harbour deepening, as well as the
road and rail enhancements in the
wider environment, is exactly what’s
needed,” says Nigel.
“New Zealand has a small economy,
so for economic growth to be
maintained and substantially
developed we need much greater
levels of productivity from our export
sector,” says Nigel.
“If New Zealand is serious about
“If the country is serious about
maintaining and developing its
competitive position in the world
then we must deliver a step
change in the cost to serve of our
international supply chain.”
this as soon as practical – that is, in
He says the required productivity
gains can be delivered through an
integrated supply chain response,
but the challenge is to progress it
with sufficient urgency.
“As soon as practical we need our
logistics infrastructure to develop
the capability to handle big ships,” he
says.
“New Zealand cannot sit back and
see competitor countries benefit
from economies of scale we can only
dream of. We need to influence and
drive change and we need to do it as
quickly as possible.”
Nigel believes New Zealand can gain
$2 to 3 billion per annum across
the wider economy from potential
freight efficiencies.
protecting its trading position in
the world we must move to achieve
three to five years.”
Nigel says experiences overseas
show that it is vital that
the supporting road and rail
infrastructure keeps pace with
port capacity. Bigger ships mean
big container exchanges, he says,
and connectivity bottlenecks are a
threat.
Port of Tauranga and KiwiRail
have achieved significant capacity
increases to the rail connections
between Tauranga and MetroPort.
Roading is being enhanced through
the $255 million Harbour Link project
to improve connections between
Tauranga and Mount Maunganui,
and access to the Port. Public
consultation is also under way on
the planned Tauranga Eastern Link
motorway between Te Maunga and
Paengaroa.
A N N UA L R E PO RT 2 0 0 9 : 2 1
P O RT FO R T HE FUT U R E - O U R PA RT N E R S
C3 LIMITED
C3 Limited is New
Zealand’s largest
on-wharf logistics
company, with more
than 600 employees
nationwide specialising
in marshalling,
stevedoring and
warehousing services
to importers and
exporters.
C3’s diverse business streams and
geographical spread have been
strategically beneficial through
the challenges of the past year.
Chief Executive Dean Camplin says
C3’s core strength has meant
the company has achieved a solid
performance in a difficult and highly
competitive period.
Formed in 2004, C3 is a 50:50 joint
venture between Port of Tauranga
Limited and Asciano Limited. Its
operations are spread over 13
ports and its expertise includes
stevedoring and handling of logs
and wood products, bulk products
such as coal and fertiliser, as well as
highly specialised steel products.
Its services include logistics and
inventory management, as well
as information distribution to
importers and exporters. C3
manages warehousing solutions at
the Port of Tauranga and supports
the Tauranga Container Terminal
with highly-trained crane and
straddle operators.
In the past year, C3 has focused
on refreshing its information
technology for the future, including
innovations to improve log inventory
management. A new, simple web
interface with wireless networking
allows C3 customers and associated
freight providers access to C3’s
data in real time, assisting with
decision-making and workflow. This
has resulted in improved customer
service, increased efficiency and
lower costs. The model is also
being adapted to improve service
and communication with general
cargo customers, and C3 expects
the system to set an international
benchmark.
The project resulted in C3’s IT
Manager Jason Garrett being a
finalist in the Innovator of the
Year Award in the awards run by
the Telecommunications Users
Association of New Zealand (TUANZ).
The Company is currently
implementing a customer
relationship management system to
integrate with this platform.
Dean says C3 has also worked with
customers to develop improved
performance benchmarks. “This is
proving really valuable in building
stronger and more productive
relationships with our customers.”
C3 has continued to invest in new
plant. “We are conscious of adding
machinery that is, in particular, fuel
efficient, low in emissions and low
in noise,” says Dean. “We have more
plant purchases scheduled for the
coming year to support the growth
in our business and the scale of
the anticipated increase in forestrelated exports.”
P O RT FO R T H E FU T U R E - O U R PA RTNERS
NORTHPORT LIMITED
Northport Limited
is strategically
positioned for longterm growth due to its
geographical position,
deep water and ready
expansion capability.
Chief Executive Jon Moore says
Northport is prepared for the future
needs created by growing exports in
forestry, processed timber and new
cargoes.
“A deep water port with plenty of
adjacent land is quite an attractive
lure for export businesses,” says Jon.
Seven-year-old Northport Limited is
a 50:50 joint venture between Port
of Tauranga Limited and Northland
Port Corporation (NZ) Limited (NPC).
A third berth at 14.5 metres deep
was added last year. The company
holds existing resource consents for
an additional 270 metres of berth
and 4.4 hectares of storage, as well
as consent to increase the size of
the harbour turning basin. There is
also the medium-term potential to
develop an additional 12 hectares of
reclaimed land, and extend berthage
by another 270 metres.
NPC also owns 180 hectares of
commercial zoned land adjacent to
the port boundary.
The company is also prepared to
accommodate larger vessels, with
New Zealand-leading tug capability
and ongoing channel optimisation
work to increase safety margins and
capacity.
“There is significant growth projected
for this region, and we are well
positioned to benefit from it with our
available space, potential to expand
and our ability to adapt quickly to the
needs of our customers and their
markets,” says Jon.
Jon says the proposed designation
of a Northland rail corridor will open
new opportunities for the port. The
company has taken an active role in
business development planning for
the region.
Northport also has a unique
approach to environmental
protection. It was the first port
wholly developed under the Resource
Management Act. All stormwater,
sedimentation and dust is collected
and treated on site. The company
sponsors the Whangarei Harbour
Health Improvement Fund, which
has sea grass planting and shellfish
reseeding projects.
Jon says Northport can take
advantage of a strong and
productive relationship with Port
of Tauranga senior management.
Another key strength is Northport’s
strong support from local and
regional councils.
“There is a robust growth structure
plan in place which sees the port as
a key asset, and a strong political
will to see this region benefit from
export growth,” says Jon.
“We don’t have any of the urban
encroachment issues that hamper
other ports’ development. Coastal
shipping and new rail routes will
certainly put us in a good position
for handling cargoes that need
plenty of storage space.”
A N N UA L R E PO RT 2 0 0 9 : 2 3
P O RT FO R T HE FUT U R E - O U R STA F F
AUBREY WILKINSON
Crane Driver, Tauranga Container Terminal
Aubrey Wilkinson is one of Port of Tauranga’s
highly-skilled crane drivers operating
the Company’s new and largest Liebherr
container crane.
Aubrey, an employee for 21 years,
has recently been appointed
permanently to the crane driving
Tauranga team averages over 33
container movements an hour, well
above the international benchmark
team and he’s delighted.
of 25 per hour. The purchase of the
new gantry crane, the port’s fifth,
His passion for the job is obvious, as
is his relentless pursuit of improved
performance. “I try to drive as
quietly, smoothly and as quickly as
possible, and while I’m doing that, I’m
also making sure that we can all go
home safely at the end of the day.”
“You’re always challenging yourself.
You’re in sole charge of yourself and
the crane and you’re always pushing
yourself to achieve a faster rate
without compromising safety,” he
says. “It’s a craft that is honed every
day on the job.”
While speed is not the sole objective,
Aubrey is proud of the fact the
will improve efficiency even further
with its ability to lift two containers
at once.
Aubrey had a brief stint on the tugs
and then transferred to the lines
crew in 1990, where he remained
until this year.
In the early 1990s, he also took up
the challenge to train as a crane
driver. He passed the strict training
regime and began working as a relief
Aubrey started work at the Port as
an electrician. The lure of working by
driver.
and on the sea was strong for this
Maketu-born and raised fisherman’s
son.
Vice-President of the Rail and
Maritime Transport Union for two
years, and has been elected to the
“Back then, we did everything
National Management Committee
for six years.
electrical, from design to delivery,
on the wharf and on the water. We
worked on buildings, substations,
lighting towers, beacons and the
crane – there was only the one back
then,” laughs Aubrey.
Aubrey has served as the National
He says the union, the largest at
the port with 300 members, has a
good relationship with the Company,
based on mutual respect, open
communication and effort.
P O RT FO R T H E FU T U R E - O U R STA FF
TANIA HOLMES
Terminal Operator Receival and Delivery, Tauranga Container Terminal
Working at the Tauranga Container Terminal
is providing one employee with a small-town
upbringing, an inspirational connection to
the rest of the world.
Rarotongan-born Tania Holmes
gate, checking the containers’
Tania relishes the knowledge she’s
moved to Mount Maunganui aged 18
documentation and putting it into
gained of the shipping, road and
from her childhood home of Tokoroa.
the system, and directing drivers to
rail industries. She takes great
She had some administration and
the straddle unloading area. The
pride in the attention to detail and
operations roles in retail before
process is reversed for imports.
accuracy required in her receipt and
working at a Sulphur Point coolstore
Tania, 29, also relieves for the rail
for five years.
team, planning the loading and
Tania started working for Port
unloading of trains to and from
of Tauranga in August 2007 with
MetroPort in Auckland, as well as
“It’s fun. It’s exciting because it’s
a short stint relieving on the
processing the paperwork.
always changing,” she says.
ShuttleSelect cargo management
Tania is in awe of the international
Tania is enjoying the development
service, processing documentation.
connectivity of the port and the
of her planning skills when she
It gave her enough of a taste for her
scale of its operations.
is rostered to work in the rail
to jump at the chance to take on a
permanent role in the Receival and
“It is such a big company, and
not just in what it means to this
dispatch role, and is also enjoying
the challenge of taking on more
responsibility within the team.
department, as well as exploring
other roles in the Company.
Delivery team in March 2008.
region. All the equipment is big too
“It’s the best job I’ve had. I love
She is now a senior member of the
– straddles, ships, the cranes. It’s all
it,” says Tania. “I love the fact that
team. Her role includes greeting
quite overwhelming, coming from a
you’re so connected to the world.”
truck drivers at the terminal
small town like Tokoroa,” she says.
A N N UA L R E PO RT 2 0 0 9 : 2 5
P O RT FO R T HE FUT U R E - O U R STA F F
ROWAN JOHNSTONE
Port Engineer, Property Division
One of Port of Tauranga’s new faces,
Port Engineer Rowan Johnstone, says
the Company’s clear focus attracted
him to the job.
“There’s a very strong direction for
at the chance to work here. The
accessible and you don’t have to go
the whole Company – the Port for
position appealed because of the
through layers of bureaucracy to
the Future. It’s not just a slogan,”
wide-ranging portfolio of work.
get things done,” he says.
says Rowan. “There’s a clear long-
He is involved in development and
term focus and there’s been a long
maintenance of the Company’s
company history of that kind of
infrastructure, as well as project
culture – planning for the future so
work to meet the Port’s commercial
that the Port can keep growing.”
objectives.
Rowan moved to the Company in
“I really like the scale of projects
October 2008 following an eight-
that I get to work on, both in
year stint at Firth Industries. As the
value and size. They are all quite
Bay of Plenty’s Area Manager for
different – I’ve worked on projects
Firth, he supervised the concrete
involving boats, wharves, cranes and
experience.
company’s winning and delivery of
maintenance dredging. It’s a variety
Rowan, who gained his honours
major projects such as the Tauranga
of work you just don’t get from
degree in engineering from
Harbour Link and the recently
many other employers,” says Rowan.
Canterbury University, was brought
completed Kawerau Geothermal
He enjoys the team environment and
up in Tauranga and is pleased his
Power Station.
the way that the Port’s employees
wife Michelle and two preschool boys
Rowan says he had long held the
are encouraged to network and
can live here while he works in his
Port in high regard as a business
socialise together. “The senior
dream job. “I’m always very proud
and as an employer, so he jumped
management team are very
saying who I work for,” he says.
“Our objectives are well
communicated, so everyone has a
sense of belonging and of working
together to achieve the common
goal.”
He admires the wealth of historic
knowledge on staff and says people
are very willing to share their
P O RT FO R T H E FU T U R E - O UR STA FF
WAYNE RUEGG
Property Officer, Property Division
When Wayne Ruegg left school to work
for the then Tauranga Harbour Board,
the Tauranga Container Terminal was not
even envisaged.
One of his first jobs was to commence
the reclamation of Sulphur Point
that ultimately grew to become the
thriving cargo terminal that exists
today.
Wayne is Port of Tauranga’s longestserving employee, clocking up 45 years
in August 2009.
He helped bring about some of the
biggest infrastructure developments
in the harbour. In addition to Sulphur
Point, Wayne helped build the eight
and nine wharf extensions and worked
on the harbour entrance widening at
Tanea Shelf in the 1970s.
He undertook early hydrographic
surveying of the harbour, contributing
data to the harbour research model,
which has shaped port development
over the decades. He also established
the Port’s first diving team.
One of the projects he is most proud
of is the reconstruction of the
Salisbury Avenue offices in 1990, when
he liaised between the Company and
the contractor on the complex job.
and if we needed to go to Omokoroa,
we would take a boat – there were
no company cars. We didn’t have
telephones in every office, and it was
a toll call to Tauranga anyway,” he says.
Wayne currently deals with the dayto-day management of the Port’s
extensive property portfolio, including
leasing, rent reviews and maintaining
databases. The Port has about 130
tenants and owns more than 185
hectares.
“What took a week then would only
take an hour now with the technology
that’s available. We now do 50 times
more stuff with far fewer people.”
“The Company has totally
transformed in my time. We certainly
didn’t have computers or CAD
(computer aided drafting) in the early
days. Our first calculator could only
do basic sums and it was huge – my
watch has more functions these
days,” says Wayne.
“We used to get the ferry to and from
work because there was no bridge,
Aged 62, Wayne has a few more
years to retirement and has no plans
yet. He celebrates his 40th wedding
anniversary with wife Carol next year,
and their two daughters live locally
with their four grandchildren – and
another two on the way.
Chief Executive Mark Cairns says
Wayne’s commitment and dedication
haven’t lessened in 45 years. “Wayne
is one of our most committed staff
and exemplifies the ‘can do’ attitude
embedded in our culture.”
A N N UA L R E PO RT 2 0 0 9 : 2 7
P O RT FO R T HE FUT U R E - S U STA I N A B I L I T Y R E P O RT
SUSTAINABILITY REPORT
“Sustainability is
about recognising
the community’s
expectations of us
and responding in
a constructive and
positive way.”
In keeping with our commitment
to creating a “Port for the Future”,
the Company has concentrated on
providing support to the youth in
our community. We recognise that
it is our responsibility to maintain
and develop the Port for the benefit
of current and future generations.
This responsibility is the essence of
sustainability and the measures we
highlight in this report reflect our
progress towards this end.
National Jazz Festival: Youth
Jazz Competition
Port of Tauranga Limited has
sponsored the National Jazz Festival,
held in Tauranga over the Easter
weekend, for a number of years. This
year, the Company committed to a
three-year sponsorship of the Youth
Jazz Competition: supporting youth
is a key element in our philosophy
of supporting our community. We
are proud to be the sponsor of
this competition which is the most
prestigious New Zealand showcase
for young, aspiring jazz musicians to
display their talents alongside other
like-minded jazz enthusiasts from
around the country.
P O RT FO R T H E FU T U R E - S U STA I N A B I L I T Y REPO RT
Newspapers in Education
Port of Tauranga Half
Port of Tauranga continues
its Gold Sponsorship of the
Tauranga’s biggest sporting event,
the Port of Tauranga Half Ironman,
this event from its inception in 1990
and is honoured to have been the
Newspapers in Education (NiE)
programme – a co-operative
effort between the newspaper
celebrated its 20th anniversary in
January 2009, with 750 individual
and 450 team contestants. Port of
title sponsor for the past 18 of those
years. Such is the popularity of this
event, entries for the 2010 event sold
industry, schools and commercial
sponsors to provide free
Tauranga has been a supporter of
out in a record 66 minutes.
newspapers and resources
to schools. NiE programmes
are designed to be useful to
teachers and engage students
in interactive, meaningful
activities that support the school
curriculum. They cover a wide
range of topics that put students
in touch with their local region and
the world around them. Recent
research found students from
American schools that used NiE
programmes achieved on average
10% better results than students
from schools with no NiE.
Donation of Computers
As part of Port of Tauranga’s
commitment to recycling
used equipment and plant, ten
computers and accompanying
software were donated to
children in the care of Child
Youth and Family (CYF). We were
gratified to receive a letter of
appreciation from the Minister
of Social Development and
Employment, acknowledging this
gift. These computers will assist
disadvantaged children in their
school work, job hunting and
skills training, and will keep them
connected with friends, families
and communities. This will be an
on-going commitment and staff
have also been encouraged to
recycle their personal computers
which will be reconditioned by
the Company’s IT staff prior to
donation to CYF.
Education
Scholarships, which honour one
young people from the Tauranga
Moana Trust Board area with tribal
of Tauranga’s leading community
affiliation with Tauranga Iwi.
figures, have been awarded annually
Each year, we are visited by
by the Port for 19 years. Four new
selected pupils from Tauranga
Girls’ College, to assist them
in their business studies. This
The Turirangi Te Kani Memorial
Tauranga students were named as
recipients of a Port of Tauranga
scholarship for tertiary study
during the year, bringing the total
recipients for 2009 to seven. The
scholarship is awarded for up
to three years’ tertiary study to
provides an opportunity for young
people to gain an appreciation of
the commercial culture and the
relevance of their studies to the
world of business.
Charity Yacht Regatta
Port of Tauranga was proud to be
the major sponsor of the Port of
Tauranga Charity Yacht Regatta,
held in March. This year’s event
raised a total of $20,000 for six
charities, including the purchase of
a van for the lead charity, CanTeen
(the New Zealand organisation
supporting young people living
with cancer). Last year’s lead
recipient, Riding for the Disabled,
received a quad bike.
A N N UA L R E PO RT 2 0 0 9 : 2 9
Port Tours
Enview
It is pleasing to note that there was
proportionately a greater number of
It is pleasing to note that the Harbour
participants in port tours from the
community. While these tours are
free, it is noted that the educational
sector has decreased, which may
be in part due to the fact that our
Conditions page is one of the most
frequently viewed pages on our
minutes, giving real time significant
wave height, wind direction and
tide/current information. This
website. Enview, Port of Tauranga’s
live Harbour Conditions Monitoring
System, is updated every three
facility has become a favourite with
recreational fishermen and surfers
as well as commercial users.
website is being accessed more
frequently by school pupils and/
or declining school budgets for
transport.
PORT TOURS
% BREAKDOWN
100%
80%
60$
BUSINESS
40$
COMMUNITY
EDUCATION
20%
2009
Sponsorship
Port Users’ Health and Safety Forum
Each year, the Company allocates
funds to assist local charities,
individuals and organisations in their
endeavours. We primarily focus on
entities that can add value to the
community, thus supporting the
New Zealand, the Department of
Labour and Accident Compensation
Corporation (ACC) to develop
common safety standards.
The following graph, produced by
ACC, further demonstrates the
success of the forum in reducing
sustainability commitment. The
funds allocated this year are similar
to the proportions distributed last
the number of workplace accidents.
PORTS COMPARATIVE DATA
YEAR ENDED 31 MARCH 2008
SPORT 23%
EDUCATION 19%
marshalling companies, Maritime
PORT I
0
PORT H
COMMUNITY 9%
to health and safety in a high-risk
working environment. This involves
working with stevedoring and
1
PORT F
BUSINESS 30%
2
PORT G
ENVIRONMENT 4%
3
PORT E
ARTS 15%
the forum’s efforts to make the
port a safer place through its
collaborative systems approach
4
PORT C
at the 2008 New Zealand Community
Safety and Injury Prevention Awards.
The commendation recognised
PORT D
which is an organisation dedicated
to promoting the wealth of the local
community.
5
PORT B
The Forum was highly commended
6
TAURANGA
Manager Operations, Nigel Drake, accepting the
award from Hon Marian Street, Minister for ACC
of funds to business is often
misunderstood. A good proportion
of this donation goes to Priority One,
ALL PORTS
year. While some of the sectors
represented in the pie chart below
are self-explanatory, the distribution
NUMBER OF CLAIMS PER $MILLION PAYROLL
2008
2007
2006
0%
Progress and Trends
A record number of cruise ships
called at Port of Tauranga this year.
The effects of the global economic
downturn are reflected in next year’s
forecast but had little impact on this
year’s result. This is because most
cruises are booked well in advance
and in the case of this year’s results,
would have been committed to before
the first signs of the economic
depression were obvious. While
the forecast decline next year is
disappointing, our market share will
Since the end of last year, the
northbound volume out of MetroPort
has decreased due to reduced
volumes of imports. This has led to
a slight decrease in the volume of
containers transported by rail but
southbound volume is expected to
increase as the new ANZL service
begins in late July 2009.
The slight decrease in the volume of
logs transported by rail is due largely
to the increase in the volume of logs
harvested from areas not serviced
by rail.
ANNUAL TEU GROWTH
ANNUAL SHIP VISITS
60
600
1,500
50
40
30
20
10
1,200
400
900
300
600
200
300
100
0
2006
2009
20%
0%
0%
2009
20%
RAIL
40%
ROAD
40%
2008
2009
60%
2007
60%
2006
80%
RAIL
80%
ROAD
100%
2007
2008
LOG RAIL VOLUMES
100%
2006
2008
TAURANGA TERMINAL
CONTAINER TRANSPORT
2007
2006
2009/10 est
2008/09
2007/08
0
2006/07
0
500
2007
CONTAINER VOLUME (TEUS) 000’S
CRUISE VESSEL CALLS
2009
Unlike cruise vessels, cargo vessel
visits were more sensitive to declining
economic conditions throughout
the year. Shipping companies are
continuing to rationalise services to
meet the challenges arising out of the
global recession. This is reflected in
the reduced number of cargo vessels
and containers this year.
2008
remain essentially the same.
A N N UA L R E PO RT 2 0 0 9 : 3 1
P O RT FO R T H E FUT U R E - S U STA I N A B I L I T Y R E P O RT
KEEPING IT SAFE
and sprain injury which unfortunately
accident-free result.
The Lost Time Injury Frequency
Rate (LTIFR) is based on an
internationally-used standard which
LOST TIME INJURIES
ACCIDENT SEVERITY RATE
precluded us from achieving a year’s
15.0
4.0
3.5
12.0
AVERAGE DAYS LOST/INJURY
2.5
2.0
1.5
1.0
0.5
9.0
6.0
3.0
2007
2009
2008
2007
2009
0.0
0.0
2008
NUMBER OF INJURIES
3.0
STAFF - COMINGS AND GOINGS
% STAFF TURNOVER
STAFF NUMBERS COMPARISON
200
10.0%
8.0%
150
# STAFF
6.0%
4.0%
100
50
2.0%
2009
2008
2009
2008
2007
2007
0.0
0.0%
LOST TIME INJURY FREQUENCY RATE (LTIFR)
15.0
12.0
9.0
6.0
3.0
0.0
2009
In the twelfth month, we had a strain
2008
11 months during this financial year.
measures the hours worked (being
the hours exposed to hazards)
relative to the number of accidents
that occurred. This produced a Lost
Time Injury Frequency Rate for this
year of 3.13, which is significantly
down on last year’s result.
2007
longest ever accident-free period of
The increase in the accident severity
rate reflects the duration of time
off against the one accident that
was recorded for the year.
LOST TIME INJURIES PER MILLION HOURS EXPOSURE
Port of Tauranga recorded its
Photo courtesy of Graeme Marshall
SEAGULL
S
SE
E
EAG
AGULL
AG
ULL IMAG
UL
IIM
IMAGE
MAG
AGE T
TO
OC
COME
OM
O
ME
ME
WORKING WITH OUR ENVIRONMENT
Harbour Bridge Project
While Port of Tauranga’s
As far back as 1994, Port of
contribution has meant some
Tauranga retained and protected
sacrifices and careful planning over
land that would possibly be required
for the widening of the existing
bridge and achieved approaches.
This was achieved by enforcing “nobuild” strips and short term leases
the years, the benefits to both
the region and the Port will be
considerable.
Sulphur Point Tree Planting
The Company has offered to plant
to enable early release of land to
Pohutukawa trees on Council owned
accommodate the construction
land along Keith Allen Drive. This will
timetable.
act as a natural extension to the
During the construction phase
existing planting between the public
of the Harbour Link Project, 1.6
road and the Tauranga Container
hectares of land adjoining the
Terminal at Sulphur Point. Planting
construction site was leased to the
will be carried out in the financial
New Zealand Transport Agency. This
year ending June 2010.
land was used for the pre-casting
Lighting Systems
systems. They are also more
aesthetically pleasing to the eye
and less confusing to recreational
boaties navigating their way through
harbour channels.
The costs of upgrading the lighting
will be compensated for by the
reduction in electricity usage over
the medium to longer term. We have
introduced a far more stringent
lighting regime when ships are not
being serviced at the port. On these
occasions, operational lighting is
switched off, leaving security lighting
to illuminate the port.
Annual Report
During the recent maintenance
friendly lighting at both the Mount
dredging campaign, additional sand
Maunganui and Sulphur Point sites.
was pumped ashore and stored on
These lights are fully shielded,
Port land to be used as fill for the
consequently reducing the glare
We have significantly reduced the
number of Annual Reports printed
this year by offering shareholders
the option of reading the publication
online. A large number of
shareholders preferred this option,
which precludes the unnecessary
generation of paperwork and its
abutments, ramps and roading.
that was common in our old lighting
attendant cost.
of the concrete beams used in the
flyover.
We have been progressively
introducing more environmentally
A N N UA L R E PO RT 2 0 0 9 : 3 3
of our business operations.
ENVIRONMENTAL
PERFORMANCE
that are owned or controlled by Port
of Tauranga.
The following section includes an
emissions inventory, calculated using
Scope 2 consists of indirect GHG
emissions from the generation of
Therefore Scope 1 and 2 emissions
have been calculated complying
with the standards and guidelines
the globally recognised Greenhouse
Gas (GHG) Protocol and broken into
two scopes:
purchased electricity consumed
by the company in its owned or
controlled equipment or operations.
set out in the GHG Protocol. Port
of Tauranga is in the process of
establishing reporting boundaries for
Scope 1 consists of direct GHG
emissions occurring from sources
We have calculated and reported on
our emissions within the boundaries
the calculation of its emissions under
the optional third scope.
RESOURCE USE – 2008/2009
RESOURCE UNIT
2006/2007
2007/2008
2008/2009
234,403
237,478
221,561
17,962,825
18,468,230
17,828,334
Water
m3
Electricity
kW-hrs
Petrol
litres
50,625
41,941
38,802
Diesel
litres
1,943,332
2,290,573
2,143,219
COMMENT (REASON FOR CHANGE FROM PREVIOUS YEAR)
Slight decrease attributed to greater awareness of water conservation
Small reduction in usage in proportion with lower container numbers
More efficient Company vehicles
Small reduction in usage in proportion with lower container numbers
EMISSIONS (TONNES CO2 EQUIVALENT)
SCOPE
SOURCE
30 JUNE 2007
30 JUNE 2008
30 JUNE 2009
1
Petrol used
118
98
90
1
Diesel used
5,179
6,139
5,744
1
Waste to landfill
Not available
1,104
1,614
1
Air travel
33
54
25
2
Electricity
3,359
3,047
2,942
There are minor differences in the
figures quoted in last year’s report
and those above for the year ended
30 June 2009. This is because the
reported emissions profile has to
be adjusted when new emission
measurement factors are released
by the New Zealand Ministry of
the use of electricity.
The most noticeable change is
in “waste to landfill”, which has
increased as a result of more
Economic Development. This is
particularly true of our biggest
source of emissions, which are
indirect emissions associated with
frequent sweeping of the port
operational areas.
RESOURCE MANAGEMENT ACT CONSENT ACTIVITY – 2008/2009
DESCRIPTION
Port channels deepening and widening
APPLICATIONS
PUBLIC
LODGED
CONSULTATION
✔
CONSENT
GRANTED
✔
✔
Mount Maunganui wharf area stormwater discharge
Port channels sand sampling for extraction
✔
Totals
2
UNDER
APPLICATION
✔
1
1
1
RESOURCE MANAGEMENT ACT - SCHEDULE OF TERM CONSENTS 2008/2009
DESCRIPTION
YEAR OBTAINED
EXPIRES (OR LAPSES)
Bore water extraction - for laying dust
1972
1 October 2026
Emergency sewerage discharge - Mount outfall
1978
1 October 2026
Occupation of the coastal marine area - section 384A of RMA
1994
30 September 2026
Discharge sludge ex Hewletts Road log storage - stormwater treatment
1995
31 August 2015
No 1 shed cooling water discharge
1996
30 November 2030
Maintenance dredging of shipping channels
2000
28 February 2020
Maintenance dredging disposal, area D, main ocean dump
2000
28 February 2020
Maintenance dredging disposal, area A, renourishment main Mount beach
2000
28 February 2020
Maintenance dredging disposal, area B & C, replenishment areas
2000
28 February 2020
Dredging disposal site for silt, area G
2000
28 February 2020
Pilot Bay beach renourishment
2000
28 February 2020
Sulphur Point sand extraction - 100,000m3 pa
2000
28 February 2020
Place and use three culverts - Waimarie Street
2002
20 November 2035
170m northern wharf extension
2002
4 February 2015
Dredging Sulphur Point - effluent treatment and discharge
2002
4 February 2015
Sulphur Point stormwater - outfall structure
2006
31 May 2041
Sulphur Point stormwater - harbour discharge
2006
31 May 2041
Hewletts Road log storage - stormwater treatment and discharge
2002
31 March 2022
Discharge stormwater from paved storage area for debarked logs
2002
31 July 2017
Minor reclamation for harbour bridge extension
2004
30 June 2038
Dredging Stella Passage - southern end of Sulphur Point
2006
31 January 2026
Port channels sand sampling for extraction
2009
31 January 2011
A N N UA L R E PO RT 2 0 0 9 : 3 5
ENVIRONMENTAL OBJECTIVES AND PERFORMANCE
AREA
OBJECTIVES
KEY PROGRESS TO DATE
Climate change
and air quality
Minimise emissions resulting from
Port-controlled operations
Completion of scopes 1 and 2 emissions inventory for 2007,
2008 and 2009 years
Diesel usage and monitoring plan being developed for
implementation, initially, by high usage plant and machinery
FUTURE PLANS/COMMITMENTS
TO IMPROVEMENT
Implementing various resource usage minimisation
programmes within the Port of Tauranga with a
view to reducing scopes 1 and 2 emissions on a per
tonne of cargo basis
Develop a plan with regards to defining boundaries
for calculating and reporting on Port of Tauranga’s
scope 3 emissions
Work with and encourage contractors to reduce
their emissions over time
Environmental
management
Implement usage of more fuelefficient plant and equipment
All recent straddle purchases have been diesel-electric,
including two in the 2009 year
Replace remaining 13 diesel straddles with more
fuel efficient straddles by 2015
Encourage all staff to use
alternative and sustainable modes
of transport
Carpool intranet being developed for use by Port of
Tauranga employees
Encourage employees to use local bus services
and/or carpool
Implement and manage all resource
consents for 100% compliance
Dust Management Plan in place to ensure various dust
control measures are undertaken for bulk cargo, including
wind loading limits, and sealing of certain dusty areas
Work closely with Environment Bay of Plenty and
Tauranga City Council to minimise effect of Port
operations on the surrounding community
$30 million enclosed coal facility specifically built in 2004 to
ensure coal dust containment
Significant increase in cleaning and sweeping of wharves in
2009 to avoid on-port debris polluting the harbour
Planting of native trees along Totara Street to minimise
aesthetic impact of Mount-side port operations over time
Noise Management Plan in accordance with Resource
Management Act, including Port Noise Liaison Committee
with public, port, port-user and Council representation
Stormwater Management Plan including stormwater
protection measures and containment areas for liquid spills
to avoid harbour pollution
Investigation, recording and review of all complaints for
breach of compliance
Replacement of all light fittings at Sulphur Point wharves
with more efficient bulbs and to reduce light-spillage
Ensure management of
environmental risks associated with
Port operations
Environmental resource consent and regulation compliance
inspections undertaken by Environment Bay of Plenty and
Tauranga City Council
Reviewal and re-development of Port of Tauranga’s
Environmental Policy
Tier 1 Oil Spill Contingency Plan for fuelling of tug and pilot
boats
Establishment of the Port of Tauranga Environmental
Management Committee
Completion of “Get Sustainable Challenge”, objectively
highlighting key areas of sustainability achievement and
areas of potential improvement for Port of Tauranga
Company support of environmental
projects
Sponsorship of the University of Waikato to undertake
environmental research on harbour conditions and the
replenishment of local beaches
Dotterel Protection Project on Matakana Island
Sponsorship and membership of Stakeholders in Methyl
Bromide Reduction Group including provision of a
representative on behalf of New Zealand ports
Resource usage
Waste
management
Improve efficiency of resource usage
including promoting and practicing
energy efficiency and water
conservation
Annual resource usage reviews
Ensure sustainability considerations
in purchasing equipment and
regular items and when building
developments around the Port
Appointment of Environmental Management Officers
throughout the Port
Minimise waste from port operations
Reuse or recycle waste wherever
possible
Dispose of waste responsibly where
recycling is not an option
Recycling stations in various areas around the Port (paper,
glass, metal, plastic, toner/printer cartridges and some
batteries)
Development of a Company-wide Recycling Policy
Old IT equipment to be re-vamped and donated to the
community where possible or recycled
On-wharf recycling of log bark/debris through an
independent contractor
Staff-led clean ups of Pilot Bay and Mount main beach
Regular audits undertaken by MAF of quarantine waste and
quarantine washing facilities
Educate and provide facilities for
port users to minimise waste and
dispose of it responsibly
Ensure quarantine waste obligations
are met
Energy conservation reminders on light switches
Company-wide Recycling Policy promoting reduce, reuse and
recycle policy
Promotion of on-line Annual Reports, resulting in significant
reductions in Annual Reports printed and posted to stakeholders from 2009 year
Use Sustainable Business Network to identify,
liaise with, and increase use of, sustainable suppliers
Investigate further recycling options including
rainwater and chemicals
Work with and encourage contractors to reduce
their waste and to implement similar reduce, reuse
and recycle policies into their operations
P O RT FO R T H E FU T U R E - CO R P O R AT E G OV E R N A N C E STATEMENT
CORPORATE GOVERNANCE STATEMENT
ROLE OF THE BOARD
BOARD COMPOSITION
The Directors are elected by shareholders and are
responsible for the corporate governance of the
The constitution states that there shall be no more
than nine Directors, nor less than six, and comprising
Company. Corporate governance describes how a
company looks after the interests of its shareholders.
The primary role of the Board is the protection and
of no more than two members or employees of the
shareholding authority, who may hold office as Directors
of the Company at the same time.
enhancement of shareholder value while respecting
the rights of other stakeholders. Good corporate
governance is core to ensuring the creation, protection
The Board currently comprises of seven non-executive
Directors of which five are independent. The biography
of each Board Member, including each Directors’ skills,
and enhancement of shareholder value.
experience, expertise, other directorships and the term
held by each Director at the date of this Annual Report
is set out in the Directors’ section on page 13 of this
The Board is committed to high standards of corporate
governance. The Board has reviewed the Company’s
corporate governance practices, as a result of two key
reports:
- NZX – Appendix 16 Corporate Governance Best
Practice Code.
- Corporate Governance in New Zealand – Principles and
Guidelines – A Handbook for Directors, Executive and
Advisors by the Securities Commission, New Zealand.
As a result of the above review the Company’s
governance processes do not materially differ from the
above two reports.
The Board oversees the business and affairs of the
Company, establishes the strategies and financial
objectives with management and monitors the
performance of management directly and through Board
Committees, monitors compliance and risk management,
ensuring the Company has the appropriate controls and
policies.
Annual Report.
In accordance with the Company’s constitution onethird, or the number nearest to one-third of the
Directors, retire by rotation at each meeting. The
Directors to retire are those who have been longest
in office since their last election. Directors retiring by
rotation may, if eligible, stand for re-election. Newly
appointed Directors must seek re-election at the
first Annual Meeting of shareholders following their
appointment.
The Board has access to executive management, and
key executive managers are invited to attend and
participate in appropriate sessions of Board meetings.
DIRECTOR INDEPENDENCE
The Board determines annually on a case-by-case basis,
who in its view, are independent Directors.
The practices adopted by the Board are prescribed in
The factors that the Company will take into account
when assessing the independence of its Directors are
the Board Charter, which sets out the protocols for
operation of the Board, and in the Code of Ethics, which
outlined in our Board Charter and state that a Director
will be deemed not to be independent if they:
sets out the manner in which Directors and employees
- are a substantial security holder of the Company,
or an associated person of a substantial security
holder (other than solely as a consequence of being a
should conduct themselves.
With the approval of the Chairman, Directors are
entitled to seek independent professional advice on
any aspect of the Directors’ duties, at the Company’s
expense.
Director); or
- have a relationship (other than in their capacity as a
Director) with the Company or a substantial security
The full content of the Company’s corporate governance
policies, practices and procedures can be found on the
holder of the Company (or one of their associated
persons has such a relationship) and, by virtue of that
Company’s website: www.port-tauranga.co.nz
relationship, that Director (or associated person) is
likely to derive, in the current financial year of the
Company, a substantial portion of their annual revenue
The Board is committed to reviewing these policies
regularly.
during such financial year.
A N N UA L R E PO RT 2 0 0 9 : 3 7
P O RT FO R T HE FUT U R E - CO R P O R AT E G OV E R N A N CE STAT E M E N T
Equally, a Director will be independent if he/she is not a
member of management and:
- has not been employed in an executive capacity by the
Company or any related company, or been a Director
after ceasing to hold such employment, within the last
three years; or
- has not been a principal of a material professional
adviser or a material consultant to the Company or a
related company, or an employee materially associated
with the service provided, within the last three years;
or
- is not a material supplier or customer of the Company
or related company, or an officer of (or otherwise
materially associated with) a material supplier or
customer; or
- has no material contractual relationship with the
Company or a related company other than as a
Director; or
- has not served on the Board for a period which
could, or could be reasonably perceived to, materially
interfere with his/her ability to act in the best
interests of the Company; or
- is free from any interest and any business or other
relationship which could, or could reasonably be
perceived to, materially interfere with his/her ability to
act in the best interests of the Company.
The Board has set a 10% materiality threshold in line
with NZX guidelines in determining independence. In
addition to the quantitative case-by-case assessment
is the qualitative assessment. Specifically, the
Board will consider whether there are any factors or
considerations which may mean that the Director’s
interest, business or relationship could, or could be
reasonably perceived to, materially interfere with the
Director’s ability to act in the best interests of the
Company.
The Board considers that David Pilkington’s role as
Director of ZESPRI Group and Ballance Agri-Nutrients
Limited, two major customers of the Port, does not
preclude him from being perceived as independent.
Mr Pilkington has no involvement in any matters
regarding tariffs and has no ability to influence decisions
on such matters. The Port of Tauranga is not a material
supplier of services to ZESPRI or Ballance.
Sir Dryden Spring is Chairman of ANZ National Bank
Limited which currently has a $100 million debt facility
with the Port. Given that the revenue streams
are immaterial for ANZ, and Sir Dryden Spring has
no involvement in matters regarding our banking
facilities, the Board considers Sir Dryden Spring to be
independent.
Based on the above factors, John Cronin and Michael
Smith are considered not to be independent, given their
relationship with Quayside Securities Limited (holding
over 54% of the shares in Port of Tauranga Limited).
CONFLICTS OF INTEREST
Where any Port of Tauranga Director has a conflict of
interest or is otherwise interested in any transaction,
that Director is generally required to disclose his or her
conflict of interest to the Company, and thereafter will
normally not be able to participate in the discussion, nor
vote in relation to the relevant matter. The Company
maintains a register of disclosed interests.
BOARD AND COMMITTEE MEETINGS
The following table outlines the number of meetings
attended by Directors during the course of the 2009
financial year:
BOARD COMMITTEES
FULL
BOARD
AUDIT
NOMINATION
J S Parker
7
2
1
1
A W Baylis
7
2
1
-
A W Capamagian
7
-
-
1
J M Cronin
7
-
1
-
REMUNERATION
D A Pilkington
7
-
1
1
M J Smith
7
2
1
1
Sir Dryden Spring
7
2
-
-
Total meetings held
7
2
1
1
The Board of Directors has established three
Committees for audit, nomination and remuneration.
Audit Committee
The Audit Committee operates under a charter
which requires it to assist the Board in fulfilling its
responsibilities regarding management’s accounting
practices, policies and controls, relative to the Group’s
financial position, and to review and make appropriate
inquiry into the audit of the Group’s financial statements
by external auditors. The Audit Committee operates
under a charter approved by the Board and reviewed by
external auditors each year.
Audit Committee:
A W Baylis, Chairman
J S Parker, Director
M J Smith, Director
Sir Dryden Spring, Director
P O RT FO R T H E FU T U R E - CO R P O R AT E G OV E R N A N C E STATEMENT
Nomination Committee
The Nomination Committee operates under a charter
which requires it to review the composition of the Board,
to ensure that the Board has the appropriate mix of
expertise and experience. When a vacancy exists, or
where it is considered that the Board would benefit
from the services of a new Director with particular skills,
the Committee selects a panel of candidates with the
appropriate expertise and experience. The most suitable
candidate is then recommended for appointment. The
Director must stand for re-election at the next general
meeting of shareholders.
Nomination Committee:
J S Parker, Chairman
A W Baylis, Director
J M Cronin, Director
D A Pilkington, Director
M J Smith, Director
Remuneration Committee
The Remuneration Committee operates under a charter
which requires it to determine and review remuneration
for Directors, Chief Executive and senior executives, and
ensure appropriate performance incentives are in place.
Remuneration Committee:
M J Smith, Chairman
A W Capamagian, Director
J S Parker, Director
D A Pilkington, Director
BOARD PERFORMANCE
The Board undertakes an annual review of the Board and
sub-committees as required by the Board Charter.
COMMUNICATION WITH SHAREHOLDERS
Port of Tauranga is committed to ensure that
shareholders are informed of all major developments
affecting the Group.
An Interim and Annual Report are published and posted
onto the Company’s website. All shareholders requesting
a hard copy are sent one.
Announcements to the NZX and media are also posted
on the website, as are copies of presentations to
analysts which are done in conjunction with the half and
full year results announced.
Shareholders may raise matters for discussion at
Annual Meetings.
CONTINUOUS DISCLOSURE
The Board has adopted the NZX Continuous Disclosure
Rules to ensure all material matters are released to
the financial markets in a clear and timely manner.
RISK MANAGEMENT
We are committed to managing risk to protect our
people, the environment, financial business risks,
company assets and our reputation.
The Company has a comprehensive risk management
system in place which is used to identify and manage all
business risks.
The Board reviews the Company risk profile annually.
As part of risk management the Port has a
comprehensive Treasury Policy that sets out
procedures to minimise financial market risk.
CODE OF ETHICS
A Code of Ethics has been developed and approved by
the Board which sets out the ethical and behavioural
standards expected by the Company’s Directors, Senior
Management Team and employees.
INSIDER TRADING
The Board has approved an Insider Trading Policy
that applies to all Directors, the Senior Management
Team and anyone else notified by the Chief Financial
Officer, from time to time, that has access to material
information not available to the public.
Under the policy the above persons cannot trade Port
of Tauranga shares, or advise or encourage others, to
trade or hold Port of Tauranga shares, if they are in
possession of material information that is not publicly
available.
In addition, shares can only be traded in selected
periods after the announcements of interim and annual
results.
The Chief Financial Officer must approve all trading of
Port of Tauranga shares prior to the trade occurring.
The NZX is advised of all trades of Port of Tauranga
shares by Directors and the Senior Management Team.
Shareholders can receive all media announcements
automatically by joining the mailing list on the Company’s
website.
A N N UA L R E PO RT 2 0 0 9 : 3 9
P O RT FO R T HE FUT U R E - R E P O RT O F T H E D I R E CTO R S TO T H E S H A R E H O L D E R S
REPORT OF THE DIRECTORS TO THE SHAREHOLDERS
Your Directors take pleasure in presenting their Annual
Report including the financial statements of the
Company and its subsidiary for the year ended
30 June 2009.
The report includes all information required to be
disclosed under the Companies Act 1993 and by the NZX.
ACTIVITIES
During the year the Group continued to operate in one
segment – Port Operations – which includes:
• wharf facilities
• back-up land for the storage and transit of import
and export cargo
• berthage
• cranes
• tug and pilotage services for exporters, importers and
shipping companies
• leasing of land and buildings
• a container terminal
The Company has a 50% shareholding in C3 Limited, a
national log marshalling, stevedoring, log measurement
and inventory management business which also
undertakes materials handling and container
maintenance. This company has a presence in thirteen
New Zealand ports and three log yards.
In conjunction with Northland Port Corporation (NZ)
Limited, a company listed on the NZX, a port at Marsden
Point was developed. This joint venture is further
explained under note 15 to the financial statements and
trades as Northport Limited.
RESULTS
Net tax paid surplus for the year was $45.185 million
(2008: $42.117 million).
Equity of the Group at year end totalled $643.057 million,
compared with the 2008 year end total of $639.210
million.
Total borrowings at year end were $210.500 million,
compared with $202.381 million in 2008.
DIVIDENDS
An interim dividend on ordinary shares of 9.0 cents per
share was paid during the year.
Directors have approved a final dividend of 18.0 cents
per ordinary share. The final dividend will be paid on
Friday 2 October 2009 to all shareholders on the
Company’s register at the close of business on Friday
18 September 2009. A solvency certificate has been
completed in support of the dividend resolution.
All dividends are fully imputed. Non-resident
shareholders will receive an additional amount under the
foreign investor tax credit regime in lieu of imputation
credits.
DIRECTORS
Mr Arthur William Baylis and Mr Alistair William
Capamagian retire by rotation, and being eligible, offer
themselves for re-election at the Annual Meeting on 22
October 2009.
REMUNERATION OF DIRECTORS
Directors’ fees received, or due and receivable during
the year, are as follows:
Northport Limited has formed a 50:50 joint venture
GROUP
company (North Tugz Limited) with Ports of Auckland
2009
$
PARENT COMPANY
2008
$
2009
$
2008
$
Limited to undertake towage operations within the
Whangarei Harbour, in particular, providing marine
services at Marsden Point.
J S Parker
96,000
92,000
96,000
92,000
A W Baylis
54,000
49,500
54,000
49,500
A W Capamagian
46,000
44,000
46,000
44,000
MetroBox Auckland Limited is a 50:50 joint venture
J M Cronin
45,000
44,000
45,000
44,000
company with KiwiRail Limited for storing, cleaning,
washing and inspecting shipping containers at the
Southdown rail terminal at Auckland – MetroPort. The
D A Pilkington
47,000
43,000
47,000
43,000
M J Smith
49,000
46,000
49,000
46,000
Sir Dryden Spring
49,000
47,000
49,000
47,000
0
14,467
0
14,467
operation is managed by Specialised Container Services
Limited (SCS). This structure combines the best
container yard location in Auckland with SCS’s knowledge
and experience as New Zealand’s leading container depot
and repair operator.
H M Titter
P O RT FO R T H E FU T U R E - R E P O RT O F T H E D I R E CTO R S TO T H E S H A R E HO LDERS
REMUNERATION OF EMPLOYEES
The number of employees whose total annual
remuneration including salary, performance bonuses,
A W Capamagian gave general notice that he is no
longer a Director of Blazon Media Limited and Cohesion
Communications Limited.
an Economic Value Added Based Executive Incentive
Scheme, employer’s contributions to superannuation
and health schemes, and other sundry benefits received
J S Parker gave general notice that he is Trustee of
Ruapehu Alpine Lifts Limited and that he is no longer
in their capacity as employees, was within the specified
bands as follows:
M J Smith gave general notice that he is Chairman of
Quayside Group of Companies.
Chairman of Taupo Motorsport Park Limited.
PARENT COMPANY
PARENT COMPANY
REMUNERATION RANGE
$000
2009
NUMBER OF EMPLOYEES
2008
NUMBER OF EMPLOYEES
100 – 109
12
9
110 – 119
7
7
120 – 129
8
8
Directors’ Loans
130 – 139
5
2
There were no loans by the Company to Directors.
140 – 149
2
3
150 – 159
2
1
160 – 169
4
5
170 – 179
4
1
180 – 189
0
1
190 – 199
1
1
1
200 – 209
0
280 – 289
0
1
290 – 299
1
0
0
310 – 319
1
330 – 339
0
1
340 – 349
1
0
350 – 359
0
1
360 – 369
1
0
680 – 689
0
1
710 – 719
1
0
D A Pilkington gave general notice that he is no longer
Chairman/Director of Old Fashioned Foods Group
Limited.
Directors’ Insurance
The Group has arranged policies of Directors’ Liability
Insurance, which together with a Deed of Indemnity,
ensures that generally Directors will incur no monetary
loss as a result of actions undertaken by them as
Directors. Certain actions are specifically excluded, for
example the incurring of penalties and fines, which may
be imposed in respect of breaches of the law.
For and on behalf of the Board of Directors
AUDITORS
Under section 19 of the Port Companies Act 1988, the
Chairman
Audit Office is the Auditor of the Company. The Audit
Office has appointed, pursuant to section 32 of the
Public Audit Act 2001, the firm of KPMG to undertake
the audit on its behalf.
The amount paid as audit fees and for other services
provided by the Auditors is set out in the accounts.
ENTRIES RECORDED IN THE INTERESTS REGISTER
Director
20 August 2009
The Directors have made the following disclosures to
the Company.
A W Baylis gave general notice that he is a Director of
NZ Fast Forward Limited and non-executive Director of
Blue River Dairy Products Limited and Antara Ag Limited
and that he is no longer Chairman and Director of
Naylor Love Enterprises Limited, and Director of NZ Fast
Forward Limited.
A N N UA L R E PO RT 2 0 0 9 : 41
AUDIT REPORT
TO THE READERS OF PORT OF TAURANGA LIMITED AND
GROUP’S FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009
The Auditor-General is the auditor of Port of Tauranga
Limited (the Company) and Group. The Auditor-General has
appointed me, Glenn Keaney, using the staff and resources
of KPMG, to carry out the audit of the financial statements
of the Company and Group, for the year ended 30 June
2009.
Unqualified Opinion
In our opinion:
• The financial statements of the Company and Group on
pages 44 to 84:
• comply with generally accepted accounting practice in
New Zealand; and
• give a true and fair view of:
• the Company and Group’s financial position as at 30
June 2009; and
• the results of their operations and cash flows for the
year ended on that date.
• Based on our examination the Company and Group kept
proper accounting records.
The audit was completed on 20 August 2009 and is the date
at which our opinion is expressed.
The basis of our opinion is explained below. In addition, we
outline the responsibilities of the Board of Directors and
the Auditor, and explain our independence.
Basis of Opinion
We carried out the audit in accordance with the AuditorGeneral’s Auditing Standards, which incorporate the New
Zealand Auditing Standards.
We planned and performed the audit to obtain all the
information and explanations we considered necessary in
order to obtain reasonable assurance that the financial
statements did not have material misstatements, whether
caused by fraud or error.
Material misstatements are differences or omissions of
amounts and disclosures that would affect a reader’s
overall understanding of the financial statements. If we had
found material misstatements that were not corrected, we
would have referred to them in our opinion.
The audit involved performing procedures to test the
information presented in the financial statements. We
assessed the results of those procedures in forming our
opinion.
Audit procedures generally include:
• determining whether significant financial and management
4 2 : AN N UAL REPORT 2009
controls are working and can be relied on to produce
complete and accurate data;
• verifying samples of transactions and account balances;
• performing analyses to identify anomalies in the reported
data;
• reviewing significant estimates and judgements made by
the Board of Directors;
• confirming year-end balances;
• determining whether accounting policies are appropriate
and consistently applied; and
• determining whether all financial statement disclosures
are adequate.
We did not examine every transaction, nor do we guarantee
complete accuracy of the financial statements.
We evaluated the overall adequacy of the presentation of
information in the financial statements. We obtained all the
information and explanations we required to support our
opinion above.
Responsibilities of the Board of Directors and the Auditor
The Board of Directors is responsible for preparing
the financial statements in accordance with generally
accepted accounting practice in New Zealand. The financial
statements must give a true and fair view of the financial
position of the Company and Group as at 30 June 2009 and
the results of their operations and cash flows for the year
ended on that date. The Board of Directors’ responsibilities
arise from the Port Companies Act 1988 and the Financial
Reporting Act 1993.
We are responsible for expressing an independent opinion
on the financial statements and reporting that opinion to
you. This responsibility arises from section 15 of the Public
Audit Act 2001 and section 19 of the Port Companies Act
1988.
Independence
When carrying out the audit we followed the independence
requirements of the Auditor-General, which incorporate the
independence requirements of the Institute of Chartered
Accountants of New Zealand.
In addition to the audit we have carried out assignments in
relation to general accounting advice, which are compatible
with those independence requirements. Other than the
audit and these assignments, we have no relationship with
or interests in the Company or any of its subsidiaries.
Glenn Keaney
KPMG
On behalf of the Auditor-General, Tauranga, New Zealand
FINANCIAL
STATEMENTS 2009
INCOME STATEMENTS...................................................................................................44
STATEMENTS OF RECOGNISED INCOME AND EXPENSE ..................................44
BALANCE SHEETS ......................................................................................................... 45
STATEMENTS OF CASH FLOWS ................................................................................ 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .............................. 49
A N N UA L R E PO RT 2 0 0 9 : 4 3
INCOME STATEMENTS
F O R T HE Y E A R E N D E D 3 0 J U N E 20 0 9
PO RT O F TAU R A NG A L I M I T E D A N D S U B S I D I A RY
ANNUAL REPORT 2009:INCOME STATEMENTS AND STATEMENTS OF RECOGNISED INCOME AND EXPENSE
GROUP
PARENT COMPANY
NOTE
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
Revenue
5
143,619
148,808
143,619
148,808
Other income
5
0
7
5,013
3,760
143,619
148,815
148,632
152,568
(30,536)
(36,618)
(30,536)
(36,618)
(16,315)
(16,118)
(16,315)
(16,118)
Depreciation and amortisation
(13,125)
(12,387)
(13,125)
(12,387)
Direct fuel and power expenses
(4,802)
(4,834)
(4,802)
(4,834)
Maintenance of property, plant and equipment
(5,715)
(5,512)
(5,715)
(5,512)
(6,659)
(6,407)
(6,659)
(6,407)
Operating expenses
(77,152)
(81,876)
(77,152)
(81,876)
Results from operating activities
66,467
66,939
71,480
70,692
Operating income
Contracted services for port operations
Employee expenses
Other expenses
6
7
Finance income
8
6,074
5,642
6,074
5,642
Finance expenses
8
(15,275)
(16,145)
(15,275)
(16,145)
(9,201)
(10,503)
(9,201)
(10,503)
Net finance costs
Share of profit from associates and joint ventures
15
Profit before income tax
Income tax expense
9
Profit for the period attributable to shareholders
of the Parent Company
Basic and diluted earnings per share (cents)
20
5,078
4,228
0
0
62,344
60,664
62,279
60,189
(17,159)
(18,547)
(17,159)
(18,588)
45,185
42,117
45,120
41,601
33.7
31.4
STATEMENTS OF RECOGNISED INCOME AND EXPENSE
GROUP
NOTE
2009
NZ$000
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
Effective portion of changes in fair value
of cash flow hedges
(5,561)
(520)
(5,561)
(520)
Net change in fair value of cash flow hedges
transferred to profit or loss
(1,137)
(1,383)
(1,137)
(1,383)
(8)
0
(8)
0
Net changes in fair value of cash flow hedges
transferred to property, plant and equipment
Net change in share of joint ventures cash flow
hedge reserves
Income and expense recognised directly in equity
19
(1,123)
(91)
(7,829)
(1,994)
(6,706)
0
0
(1,903)
Profit after tax
45,185
42,117
45,120
41,601
Total recognised income and expense for the period
37,356
40,123
38,414
39,698
These statements are to be read in conjunction with the notes on pages 49 to 84 and the Auditors’ Report on page 42.
44 : AN N UAL REPORT 20 0 9
BALANCE SHEETS
AS AT 3 0 J U NE 20 0 9
PO RT O F TAU R A N G A L I M I T E D A N D S U B S I D I A RY
PARENT COMPANY
NOTE
2008
NZ$000
2009
NZ$000
2008
NZ$000
789,482
Assets
Property, plant and equipment
10
815,882
789,482
815,882
Investment properties
11
440
440
440
440
Intangible assets
12
3,828
4,315
3,828
4,315
Advances and receivables
13
30,077
31,982
30,077
32,010
Investments in associates and joint ventures
15
35,998
37,056
31,936
31,936
16
0
2,853
0
2,853
886,225
866,128
882,163
861,036
Derivative financial instruments
Total non current assets
3,282
1,664
3,263
1,638
Receivables and prepayments
17
20,733
25,245
20,754
25,330
Inventories
18
207
449
207
449
16
1,333
Cash and cash equivalents
207
1,333
207
Income tax receivable
0
607
0
607
Total current assets
24,429
29,298
24,431
29,357
910,654
895,426
906,594
890,393
Total assets
Equity
Share capital
19
67,966
67,966
68,247
68,247
Other reserves
19
540,229
548,058
541,082
547,788
Retained earnings
19
34,862
23,186
29,934
18,323
643,057
639,210
639,263
634,358
172,200
Total equity attributable to shareholders
of the Parent Company
Liabilities
Loans and borrowings
21
210,500
172,381
210,500
16
6,358
0
6,358
0
Provisions
22
1,166
691
1,166
691
Deferred tax liabilities
23
34,638
37,838
34,638
37,838
252,662
210,910
252,662
210,729
30,000
Total non current liabilities
21
266
30,000
0
16
429
0
429
0
Trade and other payables
24
7,872
14,252
7,872
14,252
Provisions
22
1,054
Income tax payable
Total current liabilities
1,134
1,054
1,134
5,234
0
5,234
0
14,935
45,306
14,669
45,306
Total liabilities
267,597
256,216
267,331
256,035
Total equity and liabilities
910,654
895,426
906,594
890,393
For and on behalf of the Board of Directors who authorised these financial statements for issue on 20 August 2009.
Chairman
Director
A N N UA L R E PO RT 2 009 : 4 5
ANNUAL REPORT 2009:BALANCE SHEETS
GROUP
2009
NZ$000
STATEMENTS OF CASH FLOWS
ANNUAL REPORT 2009:STATEMENTS OF CASH FLOWS
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
145,859
143,427
145,859
143,427
1,845
1,645
1,845
1,645
0
0
5,013
3,753
147,704
145,072
152,717
148,825
(65,457)
Cash flows from operating activities
Cash was provided from:
Receipts from customers
Interest received
Dividends received
Cash was applied to:
Payments to suppliers and employees
(66,462)
(65,457)
(66,462)
Taxes paid
(11,644)
(19,979)
(11,644)
(19,979)
Interest paid
(14,373)
(10,646)
(14,373)
(10,646)
(92,479)
(96,082)
(92,479)
(96,082)
55,225
48,990
60,238
52,743
0
5
0
5
Net cash inflow from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from sale of investment property
Finance lease payments received
Receipts from associate companies
0
1,246
0
1,246
4,322
4,303
4,322
4,303
6,410
4,153
1,397
400
10,732
9,707
5,719
5,954
(38,533)
(34,452)
(38,533)
Cash outflow for intangibles
(251)
(174)
(251)
(174)
Interest capitalised on property, plant and equipment
(431)
(106)
(431)
(106)
(39,215)
(34,732)
(39,215)
(34,732)
(28,483)
(25,025)
(33,496)
(28,778)
Cash outflow for property, plant and equipment
Net cash used in investing activities
(34,452)
4 6 : AN N UAL REPORT 20 0 9
STATEMENTS OF CASH FLOWS
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
8,300
19,200
8,300
19,200
85
102
92
88
8,385
19,302
8,392
19,288
Cash flows from financing activities
Increase in borrowings
Proceeds from issue of new shares
Dividends paid
Net cash used in financing activities
Net increase/(decrease) in cash held
(33,509)
(44,231)
(33,509)
(44,231)
(33,509)
(44,231)
(33,509)
(44,231)
(25,124)
(24,929)
(25,117)
(24,943)
1,618
(964)
1,625
Add opening cash brought forward
1,664
2,628
1,638
2,616
Ending cash carried forward
3,282
1,664
3,263
1,638
3,282
1,664
3,263
1,638
Ending cash carried forward
3,282
1,664
3,263
1,638
(978)
Cash balances in balance sheet
A N N UA L R E PO RT 2 009 : 47
ANNUAL REPORT 2009:STATEMENTS OF CASH FLOWS
GROUP
2009
NZ$000
RECONCILIATION OF SURPLUS AFTER TAXATION
TO CASH FLOWS FROM OPERATING ACTIVITIES
ANNUAL REPORT 2009:RECONCILIATION OF CASH FLOWS
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
45,185
42,117
45,120
41,601
(2,524)
(2,734)
(2,524)
(2,734)
Reconciliation of surplus after taxation to cash flows
from operating activities
Reported surplus after taxation
Items classified as investing/financing activities:
Finance lease interest
Net loss/(gain) on sale of property, plant and equipment
0
7
0
7
(2,524)
(2,727)
(2,524)
(2,727)
12,387
11,476
Add/(less) non cash items and non operating items:
11,476
12,387
738
911
738
911
(322)
(883)
(322)
(883)
Fair value losses/(gains) on derivative financial instruments
not hedge accounted
155
(174)
155
(174)
Ineffective portion of change in fair value of cash flow hedge
155
173
155
Depreciation
Amortisation expense
Decrease in deferred taxation expense
Change in fair value of fair value hedge
173
(1,157)
(1,009)
(1,157)
(1,009)
1,009
1,157
1,009
1,157
Increase in non current profit sharing and bonus provision
305
0
305
0
Increase/(decrease) in long service leave provision
170
70
170
70
Change in fair value of fair value hedged risk
Share of surpluses retained by associates and joint ventures
(5,078)
(4,228)
0
0
8,510
7,345
13,588
11,573
3,398
(3,630)
3,398
(3,630)
242
(429)
242
(429)
5,841
(549)
5,841
(508)
Add/(less) movements in working capital:
Change in receivables and prepayments
Change in inventories
Change in income tax payable/receivable
Change in trade and other payables
Change in current provisions
Net cash flows from operating activities
(5,507)
6,524
(5,507)
6,524
80
339
80
339
4,054
2,255
4,054
2,296
55,225
48,990
60,238
52,743
4 8 : AN N UAL REPORT 20 0 9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
REPORTING ENTITY
Port of Tauranga Limited (the “Parent Company”) is a company incorporated and domiciled in New Zealand, registered
under the Companies Act 1993 and listed on the New Zealand Stock Exchange (NZX). The Parent Company is an issuer
in terms of the Financial Reporting Act 1993.
The financial statements for the Port of Tauranga Limited comprise the Port of Tauranga Limited and its subsidiary
and the Group’s interest in associates and joint ventures (together referred to as the “Group”).
Port of Tauranga Limited is involved in providing and managing port services and cargo handling facilities (Port
Operations).
2
BASIS OF PREPARATION
(a)
Statement of Compliance
The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting
Practice (NZGAAP). They comply with New Zealand Equivalents to International Financial Reporting Standards
(NZ IFRSs), and other applicable financial reporting standards as appropriate for profit-oriented entities. The
financial statements also comply with International Financial Reporting Standards (IFRS), the Companies Act
1993, the Port Companies Act 1988 and the Financial Reporting Act 1993.
The financial statements were approved by the Board of Directors on 20 August 2009.
(b)
Basis of Measurement
The financial statements are prepared on the historical cost basis except that the following assets and liabilities
are stated at their fair value: derivative financial instruments, investment property and land, buildings, harbour
improvements, and wharves and hardstanding.
The methods used to measure fair values are discussed further in note 4.
(c)
Functional and Presentation Currency
These financial statements are presented in New Zealand Dollars ($), which is the Group’s functional currency. All
financial information presented in New Zealand Dollars has been rounded to the nearest thousand.
(d)
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. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have a significant effect on the amount recognised in the financial statements, are
detailed below:
•
valuation of land, buildings, harbour improvements, and wharves and hardstanding (note 4(a) and 10);
•
valuation of financial instruments (note 4(c) and 4(d));
•
lease classification and accounting for arrangements containing a lease (note 13); and
•
provisions (note 22).
A N N UA L R E PO RT 2 009 : 4 9
ANNUAL REPORT 2009:NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1
3
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these financial statements.
(a)
Basis of Consolidation
(i)
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern
the financial and operating polices of an entity so as to obtain benefits from its activities. In assessing
control, potential voting rights that presently are exercisable, 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.
(ii)
Associates and Joint Ventures
Associates are those entities in which the Group has significant influence, but not control, over the
financial and operating policies. Joint ventures are those entities over whose activities the Group has joint
control, established by contractual agreement and requiring unanimous consent for strategic financial
and operating decisions. Associates and joint ventures are accounted for using the equity method.
The consolidated financial statements include the Group’s share of the income and expenses of equity
accounted investees, after adjustments to align the accounting policies with those of the Group, from
the date that significant influence or joint control commences, until the date that significant influence
or joint control ceases. When the Group’s share of losses exceeds its interest in an equity investee, the
carrying amount of that interest (including any long term investments) is reduced to nil and the recognition
of further losses is discontinued, except to the extent that the Group has an obligation or has made
payments on behalf of the investee.
In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying
amount of the investment and not tested for impairment separately.
(iii)
Transactions Eliminated on Consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions
with equity accounted investees are eliminated against the investment to the extent of the Group’s
interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to
the extent that there is no evidence of impairment.
(b)
Foreign Currency
Transactions in foreign currencies are translated into the functional currency of Group entities at the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in
equity as qualifying cash flow hedges.
(c)
Financial Instruments
(i)
Non Derivative Financial Instruments
Non derivative financial instruments comprise investments in equity and debt securities, receivables, cash
and cash equivalents, borrowings, and payables.
Non derivative financial instruments are recognised initially at fair value plus, for instruments not at
fair value through the profit or loss, any directly attributable transaction costs. Subsequent to initial
recognition non derivative financial instruments are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of
the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows
from the financial assets expire or if the Group transfers the financial asset to another party without
retaining substantially all risks and rewards of the asset. Ordinary purchases and sales of financial assets
are accounted for at trade date, the date that the Group commits itself to purchase or sell the asset.
Financial liabilities are derecognised if the Group’s obligations as specified in the contract expire or are
discharged or cancelled.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable
on demand and form an integral part of the Group’s cash management are included as a component of
cash and cash equivalents for the purpose of the statement of cash flows.
Accounting for finance income and expense is discussed in note 3(m).
Held-to-Maturity Investments
If the Group has the positive intent and ability to hold debt securities to maturity, then they are classified
as held-to-maturity. Subsequent to initial recognition, held-to-maturity investments are measured at
amortised cost using the effective interest method, less any impairment losses.
Other
Subsequent to initial recognition, other non derivative financial instruments are measured at amortised
cost using the effective interest method, less any impairment losses.
Investments in Equity Securities
Investments in equity securities of subsidiaries, associates and joint ventures are measured at cost in the
separate financial statements of the Parent Company.
Investments in Capital Notes
Investments in capital notes held by the Group are classified as held-to-maturity.
Receivables
Receivables are stated at their cost less impairment losses.
Loans and Borrowings
Subsequent to initial recognition, loans and borrowings are measured at amortised cost using the
effective interest method.
Trade and Other Payables
Trade and other payables are stated at cost.
(ii)
Derivative Financial Instruments and Hedging Activities
The Group uses derivative financial instruments to hedge its exposure to foreign exchange, commodity
and interest rate risks arising from operational, financing and investment activities. In accordance with
its Treasury Policy, the Group does not hold or issue derivative financial instruments for trading purposes.
However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.
Derivative financial instruments qualifying for hedge accounting are classified as non current if the
maturity of the instrument is greater than 12 months from reporting date, and current if the instrument
matures within 12 months from reporting date. Derivatives accounted for as trading instruments are
classified as current.
Derivative financial instruments are recognised initially at fair value and transaction costs are expensed
immediately. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The
gain or loss on remeasurement to fair value is recognised immediately in profit or loss. However, where
derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of
the hedging relationship (see below).
Cash Flow Hedges
Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are
recognised directly in equity to the extent that the hedge is effective. To the extent that the hedge is
ineffective, changes in fair value are recognised in profit or loss.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated
or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously
recognised in equity remains there until the highly probable forecast transaction, upon which the hedge was
based, occurs. When the hedged item is a non financial asset, the amount recognised in equity is transferred
to the carrying amount of the asset when it is recognised. In other cases the amount recognised in equity is
transferred to profit or loss in the same period that the hedge item affects profit or loss.
A N N UA L R E PO RT 2 009 : 5 1
3
3
Fair Value Hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded
in the profit or loss, together with any changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
(d)
Property, Plant and Equipment
(i)
Recognition and Measurement
The Group has five classes of property, plant and equipment:
–
–
–
–
–
freehold land
freehold buildings
harbour improvements
wharves and hardstanding
plant and equipment
Land, buildings, harbour improvements, and wharves and hardstanding are measured at fair value, based on
periodic valuations by external independent valuers. Revaluations are performed with sufficient regularity
to ensure that the carrying value of an asset does not differ materially from its fair value.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of
the asset, and the net amount is restated to the revalued amount of the asset. Increases in the carrying
amounts arising on revalued assets are credited to other reserves in shareholders’ equity. To the extent
that the increase reverses a decrease previously recognised in the income statement, the increase is first
recognised in the income statement. Decreases that reverse previous increases of the same asset, are
first charged against the revaluation reserve attributable to the asset, all other decreases are charged to
the income statement.
Capital and maintenance dredging are held as harbour improvements within property, plant and equipment.
Capital dredging has an indefinite useful life and is not depreciated. Maintenance dredging is depreciated
over three years.
Plant and equipment are stated at historical cost less depreciation and impairment losses.
The cost of purchased property, plant and equipment is the value of the consideration given to acquire the
assets and the value of other directly attributable costs which have been incurred in bringing the assets to
the location and condition necessary for their intended service. Cost also includes transfers from equity
of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and
equipment.
The cost of assets constructed by the Group includes the cost of all materials used in construction,
associated borrowing costs, direct labour on the project and an appropriate proportion of variable and
fixed overheads. The Group capitalises borrowing costs where they are directly attributable to the
acquisition, construction or production of a qualifying asset. A qualifying asset is deemed as having
expenditure exceeding $500,000 and takes a substantial period, greater than six months, to complete and
prepare the asset for its intended use. Costs cease to be capitalised as soon as the asset is ready for
productive use.
Land and buildings held by Port of Tauranga Limited to provide a port facility to facilitate trade and
commerce will be accounted for as property, plant and equipment, notwithstanding that certain land and
buildings are leased to port customers and operators.
Land and buildings that are not integral or associated with port operations and are leased with the
principal objective of earning rentals and/or for capital appreciation, are accounted for as investment
properties (refer to note 3(e)).
(ii)
Subsequent Costs
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be reliably measured.
All repairs and maintenance costs attributable to property, plant and equipment, are charged to the
income statement during the financial period in which they are incurred.
(iii)
Depreciation
Depreciation is provided on a straight line basis on all property, plant and equipment, other than freehold
land and capital dredging (included within harbour improvements), at rates calculated to allocate the
assets’ cost or valuation less estimated residual value, over their estimated useful lives.
Major useful lives are:
Freehold Buildings
Freehold buildings
33
to 100
years
3
years
Wharves and Hardstanding
Wharves
10
Wharf rocks
150
Wharf piles
60
Basecourse
Asphalt
to 60
to 200
to 130
50
15
years
years
years
years
years
Plant and Equipment
Gantry cranes
Floating plant
Other plant and equipment
Electronic equipment
to
to
to
to
years
years
years
years
Harbour Improvements
Maintenance dredging
10
10
5
3
40
25
25
5
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
(e)
Investment Properties
Land and buildings that are not integral or associated with port activities and are leased with the principal
objective to earn rental and/or capital appreciation, are accounted for as investment properties.
Subsequent to initial recognition at cost, investment properties are revalued to fair value with any change
therein recognised in profit or loss. These properties are not depreciated.
(f)
Intangible Assets
(i)
Other Intangible Assets
Other intangible assets acquired by the Group, which have finite useful lives, are measured at cost less
accumulated amortisation and accumulated impairment losses.
(ii)
Subsequent Expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates.
(iii)
Amortisation
Amortisation is recognised in profit or loss on a straight line basis over the useful lives of intangible assets,
other than goodwill, from the date that they are available for use. The estimated useful lives for the
current and comparative periods are as follows:
Rail services agreement
Computer software
(g)
10
1
to
to
15
5
years
years
Leased Assets
(i)
Where the Group is the Lessee
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership, are
classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to
the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial
recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.
A N N UA L R E PO RT 2 009 : 5 3
3
3
(ii)
Where the Group is the Lessor
When assets are leased under a finance lease, where the lessee effectively receives substantially all the
risks and benefits of ownership of the leased items, the present value of the lease payments is recognised
as a receivable. The difference between the gross receivable and the present value of the receivable is
recognised as unearned finance income.
Assets leased under operating leases are included in investment property or property, plant and
equipment, in the balance sheet, as appropriate.
(h)
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost
of inventories is determined on a first-in first-out basis, and includes expenditure incurred in acquiring the
inventories and bringing them to their existing location and condition.
(i)
Impairment of Assets
The carrying amounts of the Group’s property, plant and equipment, intangibles and investments in associates
and joint ventures and receivables, are reviewed at each reporting date to determine whether there is any
objective evidence of impairment.
Property, Plant and Equipment, Intangibles and Investments in Associates and Joint Ventures
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment of individual assets for which it is not possible to estimate the recoverable
amount, these assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating units). Impairment losses recognised in respect of cash generating units are allocated first
to reduce the carrying amount of any goodwill allocated to the cash generating unit and then to reduce the
carrying amount of the other assets in the cash generating unit on a pro-rata basis.
Impairment losses directly reduce the carrying amount of assets and are recognised in the income statement,
unless the asset is carried at a revalued amount in which case it is treated as a revaluation decrease.
Receivables
The recoverable amount of receivables carried at amortised cost is calculated as the present value of estimated
future cash flows, discounted at the original effective interest rate. Receivables with a short duration are not
discounted.
( j)
Employee Benefits
(i)
Long Term Employee Benefits
The Group grants employees certain one-off annual leave entitlements upon reaching certain long service
targets. The liability for long service leave is measured as the present value of expected future payments
to be made in respect of services provided by employees up to reporting date using the projected unit
credit method. Consideration is given to the expected future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using market yields
at the reporting date on New Zealand Government bonds with terms to maturity that match, as closely as
possible, the estimated future cash outflows.
(ii)
Short Term Benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided.
A provision is recognised for the amount expected to be paid under short term cash bonus or profit
sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of
past service provided by the employee, and the obligation can be estimated reliably.
(k)
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
(l)
Revenue
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services
in the ordinary course of the Group’s activities. Revenue is shown, net of GST, rebates and discounts. Revenue is
recognised as follows:
(i)
Port Services
Port services revenue is recognised when the related service is performed. If at reporting date, the
service is in progress, then the portion performed is recognised in the current year.
(ii)
Rental Income
Rental income from property is recognised in the income statement on a straight line basis over the term
of the lease. Lease incentives provided are recognised as an integral part of the total lease income, over
the term of the lease.
(m) Finance Income and Expense
Finance income comprises interest income on funds invested, finance lease interest, foreign currency gains, and
gains on hedging instruments that are recognised in profit or loss. Interest income is recognised as it accrues,
using the effective interest method. Finance lease interest is recognised over the term of the lease using the
net investment method, which reflects a constant periodic rate of return.
Finance expenses comprise interest expense on borrowings, unwinding of the discount of provisions, foreign
currency losses, impairment losses recognised on financial assets (except for trade receivables), and losses on
hedging instruments that are recognised in profit or loss. Except as described in note 3(d)(i), all borrowing costs
are recognised in profit or loss using the effective interest method.
(n)
Lease Payments
Payments made under operating leases are recognised in profit or loss on a straight line basis over the term of the
lease. Lease incentives are recognised as an integral part of the total lease expense, over the term of the lease.
(o)
Income Tax Expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss
except to the extent that it relates to items recognised directly in equity, in which case it is recognised directly
in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of
goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting or taxable profit; and differences relating to investments in subsidiaries and jointly
controlled entities, to the extent that they probably will not reverse in the foreseeable future. Deferred tax is
measured at the tax rates that are expected to be applied to the temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable future taxable profits will be available
against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
A N N UA L R E PO RT 2 009 : 5 5
3
3
(p)
Earnings Per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Parent Company by the
weighted average number of ordinary shares outstanding during the period.
(q)
Segment Reporting
A segment is a distinguishable component of the Group that is engaged in providing related products or services
(business segment), or in providing products or services within a particular economic environment (geographical
segment), which is subject to risks and rewards that are different from those of other segments.
The Parent Company operates in one business segment, being that of providing and managing port services and
cargo handling facilities (port operations). It operates in one geographical segment, that being New Zealand.
(r)
Group Financial Guarantees
Where the Parent Company enters into financial guarantee contracts to guarantee the indebtedness of other
companies within the Group, the Parent Company considers these to be insurance arrangements, and accounts
for them as such. In this respect, the Parent Company treats the guarantee contract as a contingent liability
until such time as it becomes probable that the Parent Company will be required to make a payment under
guarantee.
(s)
New Standards Adopted and Pronouncements Not Yet Adopted
A number of new pronouncements are not yet effective for the year ended 30 June 2009, and have not been
applied in preparing these financial statements. Those applicable to the Group are:
•
NZ IAS 1 (Amendment) Presentation of Financial Statements – effective from 1 January 2009. The
amendment requires a number of changes to the presentation and disclosures in financial statements;
•
NZ IAS 23 (Amendment) Borrowing Costs – effective from 1 January 2009. The amendment requires an
entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of
a qualifying asset as a part of that asset. The option of immediately expensing those borrowing costs will
be removed;
•
NZ IAS 27 (Revised) Consolidated and Separate Financial Statements – effective 1 July 2009. The
amendment specifies the circumstances in which an entity must consolidate the financial statements of
another entity, accounting for changes in the level of ownership interest in a subsidiary as well as loss of
control of a subsidiary, and disclosure requirements;
•
NZ IFRS 3 (Revised) Business Combinations – effective from 1 July 2009. The amendment includes a number
of updates including the requirement that all transaction costs relating to a business combination must be
expensed and subsequent remeasurement of any contingent consideration must be accounted for through
the income statement; and
•
NZ IFRS 8 Operating Segments – effective from 1 January 2009. NZ IFRS 8 replaces NZ IAS 14. The new
standard requires a “management approach”, under which segment information is presented on the same
basis as that used for internal reporting.
While the adoption of these standards is not expected to have a material impact on the Group’s financial
statements from a measurements perspective, the adoption of NZ IFRS 8 and the amended NZ IAS 1 is expected
to result in changes to the presentation of the financial statements.
DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial
and non financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes
based on the following methods. Where applicable, further information about the assumptions made in determining
fair values is disclosed in the notes specific to that asset or liability.
(a)
Land, Buildings, Investment Properties, Harbour Improvements, and Wharves and Hardstanding
All land, buildings, investment properties, harbour improvements, and wharves and hardstanding, were revalued
at fair value for non specialised assets and depreciated replacement cost for specialised assets. The latest
valuation was carried out by independent valuers at 30 June 2007, who have appropriate recognised professional
qualifications and recent experience in the location and category of assets being valued. The property values
were reviewed by independent valuers as at 30 June 2009 and they found no evidence to suggest any material
movements in value (refer note 10).
(b)
Trade Receivables and Payables
The nominal value less impairment provision of trade receivables and payables are assumed to approximate their
fair values due to their short term nature.
(c)
Derivatives
The fair value of financial instruments traded in active markets is based on quoted market prices at the
reporting date.
The fair value of financial instruments that are not traded in active markets (for example over-the-counter
derivatives) are determined by using market accepted valuation techniques incorporating observable market
data about conditions existing at each reporting date.
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The
fair value of forward exchange contracts is determined using quoted forward exchange rates at the reporting
date. The fair value of fuel swaps is calculated as the present value of estimated future cash flows, based on
forward commodity prices and forward exchange rates at the reporting date.
(d)
Non Derivative Financial Assets and Liabilities (Including Capital Notes and Finance Lease Receivables)
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at reporting date.
5
OPERATING INCOME
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
129,643
136,831
129,643
136,831
13,972
11,973
13,972
11,973
4
4
4
4
143,619
148,808
143,619
148,808
Dividend income from associates and joint ventures
0
0
5,013
3,753
Bad debts recovered
0
7
0
7
Revenue
Port services income
Rental income
Rental income from investment properties
Other income
Operating income
0
7
5,013
3,760
143,619
148,815
148,632
152,568
A N N UA L R E PO RT 2 009 : 5 7
4
6
EMPLOYEE BENEFIT EXPENSE
GROUP
2008
NZ$000
2009
NZ$000
2008
NZ$000
15,070
15,263
15,070
15,263
ACC levy
390
335
390
335
Superannuation subsidy
581
600
581
600
81
113
81
113
16,118
16,315
16,118
Wages and salaries
Medical subsidy
16,315
7
PARENT COMPANY
2009
NZ$000
OTHER EXPENSES
The following items of expenditure are included in other expenses:
GROUP
2009
NZ$000
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
0
7
0
7
Operating lease payments
516
396
516
396
Director’s fees
386
380
386
380
6
0
6
0
88
85
88
85
Loss on sale of property, plant and equipment
Bad debts written off
Auditors fees:
Audit fees paid to principal auditor
Fees paid for other services provided by the
principal auditor:
Accounting advice
9
0
9
0
NZ IFRS conversion services
0
25
0
25
FINANCIAL INCOME AND EXPENSE
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
Interest income on capital notes
1,793
Interest on finance lease
2,524
Interest income on bank deposits
Profit on currency derivatives
2009
NZ$000
2008
NZ$000
1,620
1,793
1,620
2,734
2,524
2,734
52
25
52
25
548
80
548
80
0
174
0
174
Change in fair value of fair value hedge
1,157
1,009
1,157
1,009
Finance income
6,074
5,642
6,074
5,642
(14,239)
(14,940)
(14,239)
(14,940)
Change in fair value of derivatives not hedge accounted
Interest expense on borrowings
Less: interest capitalised to property, plant and equipment
431
(13,808)
Ineffective portion of changes in fair value of
cash flow hedges
Change in fair value of fair value hedged risk
Change in fair value of derivatives not hedge accounted
Currency option expense
Finance expense
Net finance costs
106
(14,834)
431
(13,808)
106
(14,834)
(155)
(173)
(155)
(173)
(1,157)
(1,009)
(1,157)
(1,009)
(155)
0
(155)
0
(129)
0
0
(129)
(15,275)
(16,145)
(15,275)
(16,145)
(9,201)
(10,503)
(9,201)
(10,503)
A N N UA L R E PO RT 2 009 : 5 9
8
9
INCOME TAX
Components of Tax Expense
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
Profit before tax for the period
62,344
60,664
62,279
60,189
Income tax on the surplus for the period at 30.0 cents
(2008: 33.0 cents)
18,703
20,019
18,684
19,862
(1,523)
(1,395)
Tax effect of amounts which are non deductible/(taxable)
in calculating taxable income:
Share of associates and joint ventures
after tax income
Benefit of imputation credits received
Other
0
0
0
(1,504)
(21)
(77)
(21)
17,159
18,547
GROUP
17,159
0
(1,239)
(35)
18,588
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
17,503
18,758
17,503
18,799
The income tax expense is represented by:
Current tax expense
Tax payable in respect of the current period
Adjustment for prior period
Total current tax expense
(22)
17,481
672
19,430
(22)
17,481
672
19,471
Deferred tax expense
Deferred taxation
Adjustment for prior period
Total deferred tax expense (refer note 23)
Income tax expense
(322)
0
(322)
17,159
(211)
(672)
(883)
18,547
(322)
0
(322)
17,159
(211)
(672)
(883)
18,588
Imputation Credit Account
GROUP
2009
NZ$000
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
Balance as at 1 July
19,472
19,431
19,472
19,431
Income tax payments for the period
11,634
19,223
11,634
19,223
Imputation credits attached to dividends received
in the period
Imputation credits attached to dividends paid for the period
Balance as at 30 June
2,297
1,849
2,297
1,849
(15,958)
(21,031)
(15,958)
(21,031)
17,445
19,472
17,445
19,472
PROPERTY, PLANT AND EQUIPMENT
Freehold
Land
GROUP AND PARENT COMPANY
Wharves
Freehold
and
Buildings Hardstanding
Harbour
Improvements
Plant and
Equipment
Work in
Progress
NZ$000
NZ$000
Total
NZ$000
NZ$000
NZ$000
NZ$000
NZ$000
Gross carrying amount:
425,869
56,548
142,316
92,761
80,659
2,974
801,127
Additions
17,932
7,062
0
0
4
9,564
34,562
Disposals
0
0
0
0
(39)
0
20
43
1,407
0
5,896
(7,366)
Balance at 1 July 2007
Transfers to/(from) work in progress
(39)
0
(216)
0
0
0
0
0
(216)
Balance at 30 June 2008
443,821
63,653
143,723
92,761
86,520
4,956
835,434
443,821
63,653
143,723
92,761
86,520
4,956
835,434
0
0
0
0
67
38,896
38,963
4,374
5,823
3,241
2,831
982
(17,251)
0
0
0
0
0
(176)
448,195
69,476
146,964
95,592
87,569
26,425
Transfer to finance lease debtor
Additions
Transfers to/(from) work in progress
Transfer to finance lease debtor
0
(176)
874,221
Accumulated depreciation,
amortisation and impairment:
0
0
0
0
(34,498)
0
(34,498)
Depreciation expense
0
(1,503)
(5,176)
(850)
(3,947)
0
(11,476)
Disposals
0
0
0
0
22
0
0
(1,503)
0
(1,503)
Depreciation expense
0
(1,735)
0
(3,238)
(5,176)
22
(850)
(38,423)
0
(45,952)
(5,176)
(850)
(38,423)
0
(45,952)
(5,389)
(1,225)
(4,038)
0
(12,387)
(10,565)
(2,075)
(42,461)
0
(58,339)
Carrying amounts:
Net book value as at 30 June 2008
443,821
62,150
138,547
91,911
48,097
4,956
789,482
Net book value as at 30 June 2009
448,195
66,238
136,399
93,517
45,108
26,425
815,882
Valuation Information
All land, buildings, harbour improvements, wharves and hardstanding have been revalued to fair value for non
specialised assets and Depreciated Replacement Cost (DRC) for specialised assets. The valuation was carried out
as at 30 June 2007. The valuation of land and buildings was carried out by registered valuer, Mr L T Green of Almao
& Green Limited, in accordance with NZ GAAP and Valuation Standard 3. The wharves, hardstanding and harbour
improvements, were valued by our engineers and reviewed by Opus International Consultants Limited, in accordance
with NZ GAAP and with relevant Property Institute of New Zealand (PINZ) standards and guidelines, notably PS3
and GN3.2: Valuations for Financial Reporting Purposes in New Zealand. The revaluation increased the value of the
property, plant and equipment, by $228.0 million for the Group ($228.0 million for the Parent) in 2007.
In May 2009 registered valuers Hills Haden Limited, performed a review of Port property values to assess whether
the economic conditions over the last twelve months had materially impacted on their values. Their report found no
evidence to suggest any material movement in values. As a result, Directors consider the carrying value in 2008 and
2009 is not materially different to the values assessed at 30 June 2007, including subsequent additions.
A N N UA L R E PO RT 2 009 : 6 1
10
10
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
The significant assumptions applied in valuing property, plant and equipment for wharves, hardstanding and harbour
improvements are:
•
•
Civil works assets owned by Port of Tauranga Limited which are classified as specialised assets have accordingly
been valued on a depreciated replacement cost basis. Key assumptions of the valuation include:
•
Prediction and assignment of economic and remaining lives.
•
Reported condition, performance and utilisation of the asset.
•
Future use of the asset.
•
Planned replacement programme.
•
Expected changes in technology.
•
Residual values.
•
Appropriate unit replacement costs.
Valuation of land and buildings:
•
Highest and best use of land.
•
Current market expectations based on yield and recent local sales.
•
Market value of buildings is made on a depreciated replacement cost basis.
For each revalued class of property, plant and equipment, the carrying amount that would have been recognised, had
the assets been carried under the cost model, would be:
2009
Carrying
Amount
NZ$000
2008
Carrying
Amount
NZ$000
Freehold land
53,867
49,494
Freehold buildings
42,836
40,210
Wharves and hardstanding
54,901
54,266
Harbour improvements
Total
25,059
23,677
176,663
167,647
Restriction on Title
An area of 8,000 square metres of land located between the Sulphur Point wharves and the Parliamentary approved
reclamation does not have formal title. Actions are being taken to resolve the issue and obtain title. The resolution
lies with the Government.
Operating Leases
Included in the Group financial statements are land, buildings, and plant and equipment, leased to customers under
operating leases.
2009
Cost/
Valuation
NZ$000
Land
Buildings
Total
178,161
2009
Accumulated
Depreciation
NZ$000
2008
Cost/
Valuation
NZ$000
0
2008
Accumulated
Depreciation
NZ$000
170,709
0
44,546
(1,862)
40,157
(799)
222,707
(1,862)
210,866
(799)
INVESTMENT PROPERTIES
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
Balance at beginning of period
440
440
440
440
Balance at end of period
440
440
440
440
Valuation Information
Investment property at reporting date comprises land not deemed integral to Port activities. An external valuation of
the investment property was undertaken by Mr L T Green of Almao & Green Limited at 30 June 2007. At 30 June 2008
and 2009, an internal valuation was performed on the same basis, which supported the investment property’s current
valuation.
12
INTANGIBLE ASSETS
Computer
Software
NZ$000
Rail
Services
Agreement
NZ$000
Total
NZ$000
3,365
10,000
13,365
174
0
174
3,539
10,000
13,539
251
0
251
3,790
10,000
13,790
(2,226)
(6,087)
(8,313)
(348)
(563)
(911)
(2,574)
(6,650)
(9,224)
(400)
(338)
(738)
(2,974)
(6,988)
(9,962)
Cost:
Additions
Additions
Accumulated amortisation and impairment:
Carrying amounts:
Net book value 30 June 2008
965
3,350
4,315
Net book value 30 June 2009
816
3,012
3,828
Computer Software
Computer software assets are stated at cost, less accumulated amortisation and impairment.
Rail Services Agreement
Port of Tauranga Limited has paid $10,000,000 to KiwiRail (previously Toll NZ Limited) for expanded services and
obligations over a 10 year period, relating to a seven-day-a-week rail link to MetroPort Auckland. During 2008, the
term of this agreement was extended for an additional five year period until 2018.
A N N UA L R E PO RT 2 009 : 6 3
11
13
ADVANCES AND RECEIVABLES
GROUP
Advances to subsidiary (refer note 26)
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
0
0
0
28
Capital notes
16,599
16,599
16,599
16,599
Finance lease – gross receivable
19,338
23,465
19,338
23,465
Finance lease – unearned finance income
(5,860)
(8,082)
(5,860)
(8,082)
30,077
31,982
30,077
32,010
Capital Notes
C3 Limited (previously Toll Owens Limited) have issued 16,599,000 $1.00 capital notes to both the Parent Company and
Asciano Limited (previously Toll New Zealand Limited). The notes are unsecured and carry no voting rights. Interest is
receivable at the rate of 10.80% (2008: 10.80%). The notes can be converted into ordinary shares of the Company in
December 2010 (unless earlier redemption is agreed by both parties, or rolled for another three years). All or part of
the notes can be converted, however, they must be equal amounts converted for each party unless a lesser amount is
agreed to by the lesser party.
Finance Lease Receivable
In August 2003 Port of Tauranga Limited entered into an agreement with Genesis Power for the importation of coal
for the Huntly power station. As part of this agreement, a coal conveyor system was constructed by the Port and
Genesis Power agreed to lease this conveyor system for a 15 year period. Genesis Power were also granted an option
to extend the lease for an additional 15 year period for a nominal rental of $1. As Genesis Power effectively receives
substantially all the risks and benefits of ownership of the conveyor system, the lease is treated as a finance lease by
Port of Tauranga Limited. The effective interest rate on the finance lease receivable is 14.32% (2008: 14.42%).
Fair Value Estimation
The fair value of finance lease receivables and capital notes are based upon the net present value of interest and
capital payments over their term. The applicable discount rates used in determining the fair value of finance lease
receivables and capital notes were 8.31% (2008: 10.31%) and 6.79% (2008: 10.54%), respectively.
ADVANCES AND RECEIVABLES (CONTINUED)
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
4,342
4,303
4,342
4,303
19,338
21,369
19,338
21,369
0
2,096
0
2,096
Total non current portion
19,338
23,465
19,338
23,465
Total gross receivables from finance lease
23,680
27,768
23,680
27,768
Gross receivables from finance lease
Current portion
Not later than one year (refer note 17)
Non current portion
Later than one year and not later than five years
Later than five years
Unearned finance income
Current portion
Not later than one year (refer note 17)
(2,267)
(2,511)
(2,267)
(2,511)
(5,860)
(7,825)
(5,860)
(7,825)
Non current portion
0
(257)
0
(257)
Total non current portion
(5,860)
(8,082)
(5,860)
(8,082)
Total unearned finance income
(8,127)
(10,593)
(8,127)
(10,593)
GROUP
2009
NZ$000
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
Present values of minimum lease payments
Not later than one year
Total net present value of minimum lease payments
4,090
3,900
4,090
3,900
13,348
12,246
13,348
12,246
1,363
3,398
1,363
3,398
18,801
19,544
18,801
19,544
A N N UA L R E PO RT 2 009 : 6 5
13
14
INVESTMENT IN SUBSIDIARY
Investment in Subsidiary Comprises:
Interest Held By Group
Name of Entity
Port of Tauranga Trustee Company Limited
2009
%
2008
%
Balance
Date
100.00
100.00
30 June
The principal activity of Port of Tauranga Trustee Company Limited is to hold shares in trust for employees.
The Company has no trading activities and the issued and paid up capital is $2. The Company is incorporated in
New Zealand.
15
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
GROUP
2009
NZ$000
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
Investments in associates and joint ventures
0
0
31,936
31,936
0
0
31,936
31,936
37,056
36,672
0
0
Share of after tax surplus
5,078
4,228
0
0
Share of hedging reserve
(1,123)
(91)
0
0
Distributions from associates and joint ventures
(5,013)
(3,753)
0
0
35,998
37,056
0
0
35,998
37,056
31,936
31,936
Ordinary shares at cost
Included within the carrying value is:
GROUP
Goodwill
2009
NZ$000
2008
NZ$000
13,027
13,027
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (CONTINUED)
Summary financial information for associate and joint venture companies, not adjusted for the percentage ownership
of the Group:
C3
Limited
Northport
Limited
MetroBox
Auckland
Limited
Total
2009
%
50
50
50
Current assets
$000
19,058
2,400
449
21,907
Non current assets
$000
39,825
99,444
3,216
142,485
Total assets
$000
58,883
101,844
3,665
164,392
Current liabilities
$000
(9,221)
(1,842)
(5)
(11,068)
Non current liabilities
$000
(33,198)
(44,540)
(3,570)
(81,308)
Total liabilities
$000
(42,419)
(46,382)
(3,575)
(92,376)
Revenues
$000
88,287
18,225
559
107,071
Expenses
$000
(83,385)
(13,071)
(459)
(96,915)
Profit/(loss)
$000
4,902
5,154
100
10,156
Ownership
2008
Ownership
%
50
50
50
Current assets
$000
23,280
2,829
291
26,400
Non current assets
$000
39,006
102,965
3,270
145,241
Total assets
$000
62,286
105,794
3,561
171,641
Current liabilities
$000
(10,164)
(1,437)
(2)
(11,603)
$000
(33,198)
(49,156)
(3,570)
(85,924)
Total liabilities
$000
(43,362)
(50,593)
(3,572)
(97,527)
Revenues
$000
81,218
17,029
542
98,789
Expenses
$000
(76,404)
(13,466)
(462)
(90,332)
Profit/(loss)
$000
4,814
3,563
80
8,457
All associate and joint venture companies are incorporated in New Zealand.
Northport Limited
Port of Tauranga Limited has a 50:50 joint venture agreement with Northland Port Corporation (NZ) Limited (NPC), in
the port at Marsden Point which trades as Northport Limited.
Northport Limited also holds a 50% share of North Tugz Limited with Ports of Auckland Limited holding the remaining
50%. North Tugz Limited has been established to undertake the marine services within the Whangarei Harbour
including Marsden Point.
MetroBox Auckland Limited
Port of Tauranga Limited is in a 50:50 joint venture with KiwiRail (previously Toll NZ Limited), in MetroBox Auckland
Limited (MetroBox).
MetroBox is located alongside MetroPort and fits with the Group’s strategic objective of developing a “freight village”
in South Auckland with MetroPort giving customers the ability to select from a range of container handling services.
The Board of MetroBox consists of four Directors, two from KiwiRail and two from Port of Tauranga Limited. The two
Port of Tauranga Directors are Tony Reynish and Graeme Marshall.
A N N UA L R E PO RT 2 009 : 6 7
15
15
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (CONTINUED)
C3 Limited
Port of Tauranga Limited is in a 50:50 joint venture with Asciano Limited (previously Toll NZ Limited), in C3 Limited
(previously Toll Owens Limited).
C3 Limited operates marshalling and stevedoring operations in 13 New Zealand ports.
The Board of C3 Limited consists of four Directors, two from Asciano Limited and two from Port of Tauranga Limited.
The two Port of Tauranga Directors are John Parker and Mark Cairns.
16
DERIVATIVE FINANCIAL INSTRUMENTS
GROUP
2009
NZ$000
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
Current assets
Foreign currency derivatives – not designated as hedges
Foreign currency derivatives – fair value hedges
Interest rate derivatives – not designated as hedges
Interest rate derivatives – cash flow hedges
Fuel commodity derivatives – cash flow hedges
0
141
0
141
133
908
133
908
0
33
0
33
251
0
251
0
74
0
74
0
207
1,333
207
1,333
Non current assets
Foreign currency derivatives – fair value hedges
0
101
0
101
0
2,752
0
2,752
0
2,853
0
2,853
207
4,186
207
4,186
Total assets
Current liabilities
Foreign currency derivatives – not designated as hedges
(14)
0
(14)
0
(415)
0
(415)
0
(429)
0
(429)
0
Total liabilities
(6,358)
0
(6,358)
0
(6,358)
0
(6,358)
0
(6,787)
0
(6,787)
0
For additional information about the Group’s use of derivatives refer to note 30.
RECEIVABLES AND PREPAYMENTS
GROUP
Trade receivables
Receivables from associates and related parties
Advances to associates and joint ventures
Advances to subsidiary
Prepayments and sundry receivables
Finance lease – gross receivable (refer note 13)
Finance lease – unearned finance income (refer note 13)
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
16,545
18,775
16,545
18,775
136
72
136
72
1,785
3,182
1,785
3,182
0
0
21
85
192
1,424
192
1,424
4,342
4,303
4,342
4,303
(2,267)
20,733
(2,511)
25,245
(2,267)
20,754
(2,511)
25,330
Current trade and other receivables are non interest bearing and receipt is normally on 30 day terms, therefore the
carrying value of debtors and other receivables approximate their fair value.
The ageing of trade receivables at reporting date was:
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
15,473
12,954
15,473
12,954
1,061
5,196
1,061
5,196
Past due 30 – 60 days
7
608
7
608
1
10
1
10
More than 90 days
3
7
3
7
16,545
18,775
16,545
18,775
Not past due
Total
Based on past experience, the Group believes that no impairment allowance is necessary in respect of trade
receivables past due.
18
INVENTORIES
GROUP
Inventory of parts and consumables
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
207
449
207
449
Included in inventories at 30 June 2009 was $172,000 of straddle and crane parts (2008: $386,000 of straddle parts)
purchased at year end for planned maintenance of straddles and cranes in the following financial year.
A N N UA L R E PO RT 2 009 : 6 9
17
19
CAPITAL AND RESERVES
(a)
Reconciliation of Movement in Capital and Reserves
Share
Capital
GROUP
Total recognised income and expense
Hedging Revaluation
Reserve
Reserve
ShareBased
Payment
Reserve
Retained
Earnings
Total
NZ$000
NZ$000
NZ$000
NZ$000
NZ$000
NZ$000
67,759
4,416
545,636
200
25,300
643,311
0
(1,994)
0
0
42,117
40,123
7
Increase in paid up capital
207
0
0
(200)
0
Dividends to shareholders
0
0
0
0
(44,231)
(44,231)
67,966
2,422
545,636
0
23,186
639,210
0
(7,829)
0
0
45,185
37,356
0
0
0
0
(33,509)
(33,509)
(5,407) 545,636
0
34,862
643,057
Hedging Revaluation
Reserve
Reserve
ShareBased
Payment
Reserve
Retained
Earnings
Total
67,966
Share
Capital
PARENT COMPANY
NZ$000
NZ$000
NZ$000
NZ$000
NZ$000
68,047
4,055
545,636
200
20,953
638,891
0
(1,903)
0
0
41,601
39,698
NZ$000
0
Increase in paid up capital
200
0
0
(200)
0
0
0
0
0
(44,231)
68,247
2,152
545,636
0
18,323
0
(6,706)
0
0
45,120
38,414
0
0
0
0
(33,509)
(33,509)
(4,554) 545,636
0
29,934
639,263
(44,231)
634,358
(b)
68,247
Share Capital
GROUP
2009
PARENT COMPANY
2009
2008
133,955,676 134,034,876
134,004,876
2008
Ordinary shares issued
Balance as at 1 July
Shares issued during year
Balance as at 30 June
133,986,876
0
133,986,876
0
30,000
133,986,876 134,034,876
134,034,876
31,200
All shares are fully paid and have no par value. All shares rank equally with one vote attached to each fully paid
ordinary share.
During the year 0 shares (2008: 30,000 shares) at $0 (2008: $6.67) per share were issued to staff as an
incentive payment. In addition, 0 shares (2008: 1,200 shares) at $0 (2008: $5.85) per share were issued to staff
from the Port of Tauranga Trustee Company Limited.
CAPITAL AND RESERVES (CONTINUED)
(c)
Hedging Reserve
The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow
hedging instruments related to hedged transactions that have not yet occurred.
(d)
Revaluation Reserve
The revaluation reserve relates to the revaluation of land, buildings, wharves and hardstanding, and harbour
improvements.
(e)
Share Based Payment Reserve
The share based payment reserve relates to the bonus issue of shares to employees.
(f)
Dividends
The following dividends were declared and paid during the period:
GROUP
Final 2008 dividend paid 16.0 cents per share
(2007: 14.0 cps)
Special dividend 0 cents per share
(2008: 10.0 cps)
Interim 2009 dividend paid 9.0 cents per share
(2008: 9.0 cps)
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
21,446
18,765
21,446
18,765
0
13,403
0
13,403
12,063
12,063
12,063
12,063
33,509
44,231
33,509
44,231
A final dividend of 18.0 cents per share ($24,126,278) has been approved subsequent to balance date. The final
dividend was not approved until after year end, therefore it has not been accrued in the current year financial
statements.
The dividends are fully imputed. Supplementary dividends of $546,350 (2008: $750,723) were paid to
shareholders not tax resident in New Zealand, for which the Group received a foreign tax credit entitlement.
20
BASIC AND DILUTED EARNINGS PER SHARE
Group
The calculation of basic earnings per share at 30 June 2009 was based on the profit attributable to ordinary
shareholders of $45,185,000 (2008: $42,117,000) and a weighted average number of ordinary shares outstanding of
133,986,876 (2008: 133,971,276).
There are no dilutive potential ordinary shares (2008: nil).
A N N UA L R E PO RT 2 009 : 71
19
21
LOANS AND BORROWINGS
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings.
For additional information about the Group’s exposure and sensitivity to interest rate risk, refer to note 30.
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
210,500
172,200
210,500
172,200
0
181
0
0
210,500
172,381
210,500
172,200
Tranche 2 [refer note (i)]
0
25,000
0
25,000
Multi option facility [refer note (ii)]
0
5,000
0
5,000
266
0
0
0
266
30,000
0
30,000
210,766
202,381
210,500
202,200
Standby revolving cash advance facility:
Tranche 1 [refer note (i)]
Advances [refer note (iii)]
Current liabilities
Standby revolving cash advance facility:
Advances [refer note (iii)]
Total
(i)
Standby Revolving Cash Advance Facility Agreement
The Parent Company has a $250 million (2008: $250 million) financing arrangement with ANZ Banking Group
(New Zealand) Limited, Bank of New Zealand Limited and the Commonwealth Bank of Australia, New Zealand
branch. The facility, which is unsecured, provides for both direct borrowings and support for issuance of
Commercial Papers.
The standby revolving cash advance facility comprises of two tranches, tranche 1, a $225 million facility maturing
31 December 2010, and tranche 2, a $25 million facility maturing 31 December 2009 (2008: 31 December 2008).
These facilities are unsecured and lent against a negative pledge deed.
(ii)
Multi Option Facility Agreement
The Parent Company has a $10 million multi option financing facility with the Bank of New Zealand Limited, which
is primarily used for short term working capital requirements. This facility expires on 31 December 2009
(2008: 31 December 2008). The Parent Company has the option to roll-over this facility for the period of one
year, by giving notice to the Bank of New Zealand prior to the expiry of the facility. This facility is unsecured and
lent against a negative pledge deed.
(iii)
Advances
Advances are contributions by employees to the Employee Share Ownership Plan (ESOP), refer to note 29.
(iv)
Fair Values of Loans and Borrowings
Loans and borrowings are assumed to be held at fair value as debt facilities are repriced every 90 days.
21
LOANS AND BORROWINGS (CONTINUED)
Terms and conditions of outstanding loans are as follows:
GROUP
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
2010
210,500
172,200
210,500
172,200
Nominal Year of
Interest Rate Maturity
Standby revolving cash
advance facility – tranche 1
BKBM + 0.44%
PARENT COMPANY
Standby revolving cash
advance facility – tranche 2
BKBM + 0.38%
2008
0
25,000
0
25,000
Multi option facility
BKBM + 0.38%
2008
0
5,000
0
5,000
0%
2009
266
181
0
0
210,766
202,381
210,500
202,200
Advances
Total
BKBM
BKBM refers to the bank bill bid settlement rate as displayed on the Reuters Screen on page BKBM. The Group
generally borrows funds on a 90 day term.
22
PROVISIONS
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
691
621
691
621
Additional provision
211
174
211
174
Employee benefits – long service leave provisions
Unused amounts reversed
(8)
(15)
(8)
(15)
Utilised during the period
(33)
(89)
(33)
(89)
861
691
861
691
Employee benefits – profit sharing and bonuses
0
0
0
0
305
0
305
0
305
0
305
0
1,166
691
1,166
691
1,054
715
1,054
715
1,134
1,054
1,134
1,054
Total non current provisions
Current liabilities
Employee benefits – profit sharing and bonuses
Utilised during the period
(1,054)
1,134
1,054
1,134
1,054
Total current provisions
1,134
1,054
1,134
1,054
(715)
(1,054)
(715)
Uncertainties for provisions relate to the probabilities of staff reaching the required vesting period to actually qualify
for long service leave. Probability factors for reaching long service leave entitlements are based on historic staff
retention information.
A N N UA L R E PO RT 2 009 : 73
Terms and Debt Repayment Schedule
23
DEFERRED TAXATION
Assets
Net
2008
NZ$000
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
0
0
32,099
32,639
32,099
32,639
Intangible assets
0
0
149
207
149
207
Finance lease receivables
0
0
4,666
5,153
4,666
5,153
GROUP AND
PARENT COMPANY
Liabilities
2009
NZ$000
Deferred tax (asset)/liability
Derivatives
Provisions and accruals
Total
(1,912)
0
0
1,256
(1,912)
1,256
(364)
(1,417)
0
0
(364)
(1,417)
(2,276)
(1,417)
36,914
39,255
Recognised in
Profit or Loss
Recognised
In Equity
2009
NZ$000
2008
NZ$000
(540)
(267)
0
0
(58)
(20)
0
0
(487)
(451)
0
Derivatives
(290)
303
Intangible assets
Provisions and accruals
Total
24
37,838
2008
NZ$000
GROUP AND
PARENT COMPANY
2009
NZ$000
34,638
(2,878)
1,053
(462)
0
0
14
0
(322)
(883)
(2,878)
0
(816)
0
0
(816)
TRADE AND OTHER PAYABLES
GROUP
Accounts payable
Accruals
Payables due to associates and related parties
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
882
5,982
882
5,982
6,059
6,796
6,059
6,796
931
1,474
931
1,474
7,872
14,252
7,872
14,252
Payables denominated in currencies other than the functional currency comprise of trade payables denominated in
US$0 (2008: US$45,000).
Trade and other payables are non interest bearing and are normally settled on 30 day terms, therefore the carrying
value of trade and other payables approximates their fair value.
OPERATING LEASE OBLIGATIONS
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
Within one year
812
One year to two years
709
332
812
332
297
709
1,037
297
563
1,037
563
Obligations payable after balance date on non cancellable
operating leases are as follows:
Two years to five years
859
1,031
859
1,031
3,417
2,223
3,417
2,223
2009
NZ$000
2008
NZ$000
Services provided to Port of Tauranga Limited
9,195
8,443
Services provided by Port of Tauranga Limited
1,331
1,165
16,599
16,599
Services provided to Port of Tauranga Limited
0
32
Services provided by Port of Tauranga Limited
19
4
0
1,397
1,785
1,785
21
113
Greater than five years
26
RELATED PARTY TRANSACTIONS
Related party transactions with subsidiaries, associates and joint ventures:
C3 Limited
Accounts receivable by Port of Tauranga Limited (capital notes)
Northport Limited
Advances by Port of Tauranga Limited
MetroBox Auckland Limited
Advances by Port of Tauranga Limited
Port of Tauranga Trustee Company Limited
Advances to Port of Tauranga Trustee Company Limited for employees in
share ownership plan by Port of Tauranga Limited (refer notes 13 and 17)
During the year, the Group entered into transactions with companies in which Group Directors hold directorships.
These transactions have occurred on normal commercial terms.
No interest is charged on advances to associates and joint ventures and are repayable on demand.
No related party debts have been written off or forgiven during the year.
Controlling Entity
Quayside Securities Limited owns 54.98% of the ordinary shares in Port of Tauranga Limited.
Quayside Securities Limited is beneficially owned by Bay of Plenty Regional Council.
Transactions with Key Management Personnel
The Group does not provide any non cash benefits to Directors and executive officers in addition to their Directors’
fees or salaries.
A N N UA L R E PO RT 2 009 : 75
25
26
RELATED PARTY TRANSACTIONS (CONTINUED)
GROUP
2009
NZ$000
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
Short term employee benefits
Directors fees
Executive salaries
27
386
380
386
380
2,029
1,861
2,029
1,861
COMMITMENTS
GROUP
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
1,997
15,499
1,997
15,499
Capital commitments
Estimated capital commitments for the Group contracted
for at balance date but not provided for
28
CONTINGENT LIABILITIES
At 30 June 2009 there were $0 contingent liabilities (30 June 2008: $0).
29
EMPLOYEE SHARE OWNERSHIP PLAN
The Parent Company has an Employee Share Ownership Plan (ESOP), in terms of section DC12 of the Income Tax Act
2004. At balance date the ESOP held 0.04% of the Parent Company’s share capital in ordinary shares (2008: 0.04% of
the Parent Company’s share capital).
To finance the plan the ESOP borrows from the Parent Company interest free, repayable over three years. The ESOP
has no external funding. The ESOP has a non beneficial interest in all shares allocated to employees, and a beneficial
interest in shares which have not been allocated.
Neither the Parent Company nor its related parties have rights to acquire shares held by the plan.
Employees are able to subscribe for shares up to a value of $2,340 once every three years.
The value of shares issued is set at 90% of the average market price of the share on the day of issue.
At balance date the Parent Company held 48,000 shares (2008: 48,000), of these, 42,800 (2008: 44,400) were
allocated to employees and have been paid up to $264,477 (2008: $181,326), and $21,120 (2008: $92,019) remains to be
paid. This is to be repaid over a three year term. No shares are subject to options.
The Trustees of the ESOP are appointed by the Directors of the Parent Company.
The shares held by the ESOP carry the same voting rights as other issued ordinary shares. Voting rights attaching to
the shares held by Trustees are to be exercised by the Trustees at their discretion in the case of a vote on a poll, or
on any particular resolution.
FINANCIAL INSTRUMENTS
The Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including
interest rate risk, currency risk and commodity risk).
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies
and processes for measuring and managing risk, and the Group’s management of capital.
The Group’s overall financial risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s financial risk
management framework. The Board has established the Audit Committee, which is responsible for developing and
monitoring the Group’s financial risk management policies. The Audit Committee reports regularly to the Board of
Directors on its activities.
The Group’s financial risk management policies are established to identify and analyse the financial risks faced by
the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Financial risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities.
The Audit Committee oversees how management monitors compliance with the Group’s financial risk management
policies and procedures and reviews the adequacy of the financial risk management framework in relation to the risks
faced by the Group.
The Group held the following financial instruments at reporting date:
Designated
at Fair
Value
GROUP 2009
NZ$000
Assets
Held for
Trading
Through
Profit or Loans and
Loss Receivables
NZ$000
NZ$000
Held to
Maturity
Other
Amortised
Cost
Total
Carrying
Amount
Fair
Value
NZ$000
NZ$000
NZ$000
NZ$000
Assets
Advances and receivables,
including capital notes
0
0
13,478
16,599
0
30,077
32,219
0
0
13,478
16,599
0
30,077
32,219
0
0
3,282
0
0
3,282
3,282
22,748
Trade and other receivables
0
0
20,733
0
0
20,733
207
0
0
0
0
207
207
207
0
24,015
0
0
24,222
26,237
Total assets
207
0
37,493
16,599
0
54,299
58,456
210,500
0
0
0
0
210,500
210,500
6,358
0
0
0
0
6,358
6,358
6,358
0
0
0
210,500
216,858
216,858
0
0
0
0
266
266
266
415
14
0
0
0
429
429
Total liabilities
0
0
0
0
7,872
7,872
7,872
415
14
0
0
8,138
8,567
8,567
6,773
14
0
0
218,638
225,425
225,425
A N N UA L R E PO RT 2 009 : 7 7
30
30
FINANCIAL INSTRUMENTS (CONTINUED)
Assets Held
for Trading
Designated
Through
at Fair
Value
Loss Receivables
GROUP 2008
Held to
Maturity
Other
Amortised
Cost
Total
Carrying
Amount
Fair
Value
NZ$000
NZ$000
NZ$000
32,332
NZ$000
NZ$000
NZ$000
NZ$000
Assets
Advances and receivables, including
capital notes
0
0
15,383
16,599
0
31,982
Derivatives financial instruments
2,853
0
0
0
0
2,853
2,853
2,853
0
15,383
16,599
0
34,835
35,185
0
0
1,664
0
0
1,664
1,664
Trade and other receivables
0
0
25,245
0
0
25,245
27,354
1,159
174
0
0
0
1,333
1,333
1,159
174
26,909
0
0
28,242
30,351
Total assets
4,012
174
42,292
16,599
0
63,077
65,536
0
0
0
0
172,381
172,381
172,381
0
0
0
0
172,381
172,381
172,381
0
0
0
0
30,000
30,000
30,000
0
0
0
0
14,252
14,252
14,252
0
0
0
0
44,252
44,252
44,252
Total liabilities
0
0
0
0
216,633
216,633
216,633
Assets Held
for Trading
Designated
Through
at Fair
Value
Loss Receivables
Held to
Maturity
Other
Amortised
Cost
Total
Carrying
Amount
Fair
Value
PARENT COMPANY 2009
NZ$000
NZ$000
NZ$000
NZ$000
NZ$000
NZ$000
NZ$000
capital notes
0
0
13,478
16,599
0
30,077
32,219
0
0
13,478
16,599
0
30,077
32,219
Assets
0
0
3,263
0
0
3,263
3,263
0
0
20,754
0
0
20,754
22,769
207
0
0
0
0
207
207
207
0
24,017
0
0
24,224
26,239
Total assets
207
0
37,495
16,599
0
54,301
58,458
0
0
0
0
210,500
210,500
210,500
6,358
0
0
0
0
6,358
6,358
6,358
0
0
0
210,500
216,858
216,858
415
14
0
0
0
429
429
0
0
0
0
7,872
7,872
7,872
Total liabilities
415
14
0
0
7,872
8,301
8,301
6,773
14
0
0
218,372
225,159
225,159
PARENT COMPANY 2008
Designated
at Fair
Value
NZ$000
Assets Held
for Trading
Through
Loss Receivables
NZ$000 NZ$000
Held to
Maturity
NZ$000
Other
Amortised
Cost
NZ$000
Total
Carrying
Amount
NZ$000
Fair
Value
NZ$000
32,360
Assets
capital notes
0
0
15,411
16,599
0
32,010
2,853
0
0
0
0
2,853
2,853
2,853
0
15,411
16,599
0
34,863
35,213
0
0
1,638
0
0
1,638
1,638
0
0
25,330
0
0
25,330
27,439
1,159
174
0
0
0
1,333
1,333
1,159
174
26,968
0
0
28,301
30,410
Total assets
4,012
174
42,379
16,599
0
63,164
65,623
0
0
0
0
172,200
172,200
172,200
0
0
0
0
172,200
172,200
172,200
30,000
0
0
0
0
30,000
30,000
0
0
0
0
14,252
14,252
14,252
0
0
0
0
44,252
44,252
44,252
Total liabilities
0
0
0
0
216,452
216,452
216,452
(a)
Credit Risk
Counterparty credit risk is the risk of losses (realised or unrealised) arising from a counterparty failing to meet
its contractual obligations. Financial instruments which potentially subject the Group to credit risk, principally
consist of bank balances, receivables from customers and derivative instruments.
Exposure to Credit Risk
The carrying amount of financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at reporting date was:
GROUP
2009
NZ$000
PARENT COMPANY
2008
NZ$000
2009
NZ$000
2008
NZ$000
Advances and receivables
30,077
31,982
30,077
32,010
20,733
25,245
20,754
25,330
Total
207
4,186
207
4,186
3,282
1,664
3,263
1,638
54,299
63,077
54,301
63,164
The only significant concentration of credit risk at reporting date relates to the finance lease receivables for
the Genesis equipment lease and capital notes issued by an associate company, C3 Limited. Management are
satisfied with the credit quality of both these debtors and does not anticipate any non performance.
The Group only transacts in treasury activity (including investment, borrowing and derivative transactions) with
Board approved counterparties. Unless otherwise approved by the Board, counterparties are required to be
New Zealand registered banks with a Standard & Poor’s credit rating of A+ or above. The Group continuously
monitors the credit quality of the financial institutions that are counterparties and does not anticipate any
non performance.
A N N UA L R E PO RT 2 009 : 79
30
30
The Group adheres to a credit policy that requires that each new customer is analysed individually for credit
worthiness before the Group’s standard payment terms and conditions are offered. Customer payment
performance is constantly monitored with customers not meeting creditworthiness being required to transact
with the Group on cash terms. The Group generally does not require collateral.
The nature of the Group’s business means that the top ten customers account for 59.3% of total Group revenue
(2008: 58.9%) and 17.6% of the Group’s revenue is attributable to sales transactions with a single customer
(2008: 20.8%). The Group is satisfied with the credit quality of these debtors and does not anticipate any non
performance.
(b)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due.
The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient
cash and borrowing facilities available to meet its liabilities when due, under both normal and adverse conditions.
The Group’s cash flow requirements and the utilisation of borrowing facilities are continuously monitored, and it
is required that committed bank facilities are maintained at a minimum of 10% above maximum forecast usage.
Funding risk is the risk that arises when either the size of borrowing facilities or the pricing thereof is not able
to be replaced on similar terms, at the time of review with the Parent Company’s banks. To minimise funding
risk it is Board policy to spread the facilities’ renewal dates and maturity of individual loans. Where this is not
possible, extensions to, or the replacement of, borrowing facilities are required to be arranged at least six
months prior to each facility’s expiry.
The following table sets out the contractual cash outflows for all financial liabilities (including estimated interest
payments) and derivatives:
GROUP 2009
Balance Contractual
Sheet Cash Flows
NZ$000
NZ$000
6 Months
or Less
NZ$000
6 – 12
Months
NZ$000
1–2
Years
NZ$000
2–5
Years
NZ$000
More Than
5 Years
NZ$000
Non derivative financial liabilities
210,766
221,030
3,706
3,384
213,940
0
0
7,872
7,872
7,872
0
0
0
0
218,638
228,902
11,578
3,384
213,940
0
0
7,548
8,295
2,156
2,565
2,916
568
90
0
Derivatives
Interest rate derivatives outflow
Forward exchange contracts:
Outflow
0
1,427
1,427
0
0
0
(119)
(1,546)
(1,546)
0
0
0
0
7,429
8,176
2,037
2,565
2,916
568
90
Total
226,067
237,078
13,615
5,949
216,856
568
90
GROUP 2008
Balance Contractual
Sheet Cash Flows
NZ$000
NZ$000
6 Months
or Less
NZ$000
6 – 12
Months
NZ$000
1–2
Years
NZ$000
2–5
Years
NZ$000
More Than
5 Years
NZ$000
39,232
7,739
15,788
180,067
0
Inflow
Non derivative financial liabilities
202,381
242,826
14,252
14,252
14,252
0
0
0
0
216,633
257,078
53,484
7,739
15,788
180,067
0
120
169
0
0
12
84
73
0
Derivatives
Interest rate derivatives outflow
Forward exchange contracts:
Outflow
Inflow
Total
0
10,832
5,668
3,852
1,312
0
(1,009)
(11,841)
(6,224)
(4,204)
(1,413)
0
0
(889)
(840)
(556)
(352)
(89)
84
73
215,744
256,238
52,928
7,387
15,699
180,151
73
A N N UA L R E PO RT 2 009 : 8 1
30
30
Parent Company
The cash flows for all financial liabilities and derivatives for the Parent Company differ only in one respect to
the tables shown above for the Group, being that the Parent Company has no liability in respect of advances
$266,000 (2008: $181,000) included in loans and borrowings being contributions by employees to the Employee
Share Ownership Plan which are settled by way of share issuance (refer note 29).
The following table indicates the periods in which the cash flows associated with derivatives that are cash flow
hedges are expected to occur and also impact on profit or loss:
2009
Balance Contractual
Sheet Cash Flows
NZ$000
NZ$000
6 Months
or Less
NZ$000
6 – 12
Months
NZ$000
1–2
Years
NZ$000
2–5
Years
NZ$000
More Than
5 Years
NZ$000
0
0
0
268
853
Interest rate swaps
Assets
Liabilities
775
1,121
(7,548)
(8,295)
(2,156)
(2,565)
(2,916)
(568)
(90)
(6,773)
(7,174)
(2,156)
(2,565)
(2,916)
(300)
763
Commodity contracts
Assets
2008
74
76
29
47
0
0
0
(6,699)
(7,098)
(2,127)
(2,518)
(2,916)
(300)
763
Balance Contractual
Sheet Cash Flows
NZ$000
NZ$000
6 Months
or Less
NZ$000
6 – 12
Months
NZ$000
1–2
Years
NZ$000
2–5
Years
NZ$000
More Than
5 Years
NZ$000
Interest rate swaps
Assets
Liabilities
(c)
3,123
3,822
1,282
785
1,247
494
14
(120)
(169)
0
0
(12)
(84)
(73)
3,003
3,653
1,282
785
1,235
410
(59)
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
commodity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk.
The Group uses derivative financial instruments such as interest rate swaps and foreign currency options to
hedge certain risk exposures. All derivative transactions are carried out within the guidelines set out in the
Group’s Treasury Policy which have been approved by the Board of Directors. Generally the Group seeks to apply
hedge accounting in order to manage volatility in profit or loss.
(i)
Interest Rate Risk
Interest rate risk is the risk of financial loss, or impairment to cash flows in current or future periods,
due to adverse movements in interest rates on borrowings or investments. The Group uses interest rate
derivatives to manage its exposure to variable interest rate risk by converting variable rate debt to fixed
rate debt.
At reporting date the interest rate profile of the Group and Parent Company’s interest-bearing financial
assets/(liabilities) were:
GROUP
Carrying Amount
PARENT COMPANY
2009
NZ$000
2008
NZ$000
2009
NZ$000
2008
NZ$000
15,553
17,175
15,553
17,175
Capital notes
16,599
16,599
16,599
16,599
Interest rate derivatives
(6,773)
Fixed rate instruments
3,036
(6,773)
3,036
25,379
36,810
25,379
36,810
(210,500)
(197,200)
(210,500)
(197,200)
Variable rate instruments
Standby revolving cash advance facility
Multi option facility
Cash balances
0
(5,000)
0
3,282
1,664
3,263
(207,218)
(200,536)
(207,237)
(5,000)
1,638
(200,562)
Sensitivity Analysis
If at reporting date bank interest rates had been 100 basis points higher/lower, with all other variables
held constant, it would increase/(decrease) post tax profit or loss and the cash flow hedge reserve by the
amounts shown below. The analysis is performed on the same basis for 2008.
Profit or Loss
Interest rate swaps
30 June 2009
Interest rate swaps
30 June 2008
(ii)
Cash Flow Hedge Reserve
100 bp
Increase
NZ$000
100 bp
Decrease
NZ$000
100 bp
Increase
NZ$000
100 bp
Decrease
NZ$000
(1,450)
1,450
0
0
852
(852)
3,905
(4,165)
(598)
598
3,905
(4,165)
(1,360)
1,360
0
850
(816)
2,122
(2,193)
(510)
544
2,122
(2,193)
0
Currency Risk
Foreign currency risk is the risk arising from the variability of the NZD currency values of the Group’s
assets, liabilities and operating cash flows, caused by changes to foreign exchange rates.
The Group does not have any material exposure to currency risk except for the one-off purchases of
assets (eg plant and machinery) denominated in foreign currencies. It is Group policy that foreign exchange
exposures on imported goods must be hedged by way of foreign exchange forward contracts or options
to a minimum of 50% at the time the exposure is known with certainty on all transactions in excess of
NZ$200,000.
At 30 June 2009, the Group had entered into forward contracts to purchase EUR$665,000 as a fair value
hedge of a capital commitment (2008: EUR$5.7 million) and SG$95,000 for a non hedge accounted capital
commitment (2008: $0). In the prior year, the Group had also entered into option agreements to purchase
US$1.6 million for certain operating expenditures.
A N N UA L R E PO RT 2 009 : 8 3
30
30
At reporting date, a 10% strengthening/weakening of the above currencies against the New Zealand dollar,
with all other variables held constant, would have an immaterial impact on the Group’s post-tax profit and
equity for the period.
(iii)
Commodity Price Risk
The Group manages commodity price risks through the use of negotiated supply contracts and commodity
derivatives. The negotiated supply contracts are for the purpose of receipt in accordance with the Group’s
expected usage requirements only and are not accounted for as financial instruments.
The Group uses commodity derivatives and fuel swap agreements, to reduce the impact of price changes
on fuel costs in accordance with Group policy. Up to 75% of the next twelve months’ operating fuel costs
may be hedged via commodity derivatives. At 30 June 2009, the Group had hedged 7,548 barrels (2008: 0),
with a fair value of $74,000 (2008: 0). The agreements mature within one year.
At reporting date, a NZ$25 increase/decrease in the New Zealand dollar price of diesel fuel oil in relation to
commodity derivatives, would have an immaterial impact on the Group’s post tax profit and equity for the
period.
(d)
Capital Management
The Board’s policy is to maintain a strong capital base, which the Group defines as total shareholders’ equity, so
as to maintain investor, creditor and market confidence, and to sustain the future business development of the
Group. The Board endeavours to maintain a balance between the higher returns that might be possible with
higher levels of borrowings and the advantages and security afforded by a sound capital position. The Group
has established policies in capital management, including the specific requirements that interest cover is to be
maintained at a minimum of three times and that the [debt/(debt + equity)] ratio is to be maintained at a 40%
maximum. It is also Group policy that the dividend payout is maintained between a level of between 75% and
100% of surplus after tax.
The Group and Parent are required to comply with certain financial covenants in respect of external borrowings
namely that: interest cover is to be maintained at a minimum of two times; shareholders funds as a percentage
of total tangible assets must exceed 45% at all times; and total tangible assets and earnings before interest
and taxes (EBIT) for the Parent must at all times exceed 85% of total tangible assets and EBIT respectively for
the Group.
There have been no changes in the Group’s approach to capital management during the year.
The Port of Tauranga Limited has complied with all capital management objectives during the reporting periods
as follows:
GROUP
2009
2008
Port of Tauranga Group policies
5.4
5.1
Debt ratio
25%
24%
Dividend payout ratio as a percentage of net profit after tax
(excluding special dividends)
80%
80%
Interest cover
GROUP
2009
2008
Bank covenants
5.4
5.1
71%
71%
Parent EBIT as percentage of Group EBIT
100%
99%
Parent tangible assets as a percentage of Group tangible assets
100%
99%
Interest cover
Shareholders funds as a percentage of tangible assets
STATUTORY
INFORMATION
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
AS
F
O RATT HE
2 0 YAU
E AGRU ST
E N D20
ED
0 93
30
0 JUNE 2
20
009
PO
RT O
F TAU R A N
GA LIM
B S I D IIA
A RY
PORT
OF
NG
MII T E D A N D S U
UBS
SHAREHOLDER INFORMATION
TWENTY LARGEST ORDINARY EQUITY HOLDERS
Holder
Number Held
% of Issued Equity
Quayside Securities Limited
73,687,536
54.98
NZ Central Securities Depository Limited
17,924,030
13.37
Custodial Services Limited (3 A/c)
4,371,628
3.26
1,432,693
1.07
895,848
0.67
Private Nominees Limited (Residents A/c)
624,287
0.47
Masfen Securities Limited
545,000
0.41
529,252
0.39
Investment Custodial Services Limited (C A/c)
421,518
0.31
390,047
0.29
Lloyd James Christie
307,000
0.23
Custodial Services Limited (A/c 9 – MDZ)
274,342
0.20
Karen Maureen Pensabene (Keep A/c)
260,000
0.19
225,260
0.17
Fraser Grant McKenzie & Dorothy Ann McKenzie
200,306
0.15
PGG Wrightson Employee Benefits Plan Limited
200,000
0.15
ASB Nominees Limited (Colin John Boocock A/c)
190,000
0.14
John Axford Kenneth Commons
155,000
0.12
NZ Guardian Trust Co Limited (NZSX 50 Portfolio Index Fund A/c)
152,391
0.11
Forsyth Barr Custodians Limited (1 M A/c)
129,188
0.10
FNZ Custodians Limited
102,915,326
Total
76.78%
DISTRIBUTION OF EQUITY SECURITIES
Range of Equity Holdings
1 - 5,000
Number of Holders
Number of Shares Held
% of Issued Equity
6,909
12,694,877
9.47
5,001 - 10,000
992
7,338,797
5.48
10,001 - 50,000
511
9,632,967
7.19
50,001 - 100,000
15
983,974
0.73
100,001 and over
24
103,384,261
77.13
8,451
134,034,876
100.00%
Total
A N N UA L R E P
PO
ANNUAL
O RT 2 0009
09 : 85
RN
T S 2O 0L 0I D9 A: TS ET DA TFUI NT AO NRCYI AI LN S
F TO ART M
A TE INOT N
A N N U A L R E P O R T 2 0 0 9 : NAONT N
E SU AT L
O TR HE EP O
CO
EM
S
The ordinary shares of Port of Tauranga Limited are listed on the NZX. The information in the disclosures below has been
taken from the Company’s registers as at 20 August 2009.
STATUTORY INFORMATION
AS AT 2 0 AU G U ST 2 0 0 9
P O RT O F TAU R A N G A L I M I T E D A N D S U B S I D I A RY
SUBSTANTIAL SECURITY HOLDERS
Holder
Quayside Securities Limited
ANNUAL
Number Held
%
73,687,536
54.98
The total number of issued voting securities of the Company as at 20 August 2009 was 134,034,876.
DIRECTORS’ SECURITY HOLDINGS
REPORT
2009 : STATU TORY
IN FORM ATION
The following information is given in accordance with section 26 of the Securities Amendment Act 1988. According to
notices received, the following persons were substantial security holders in the Company as at 20 August 2009.
BENEFICIALLY HELD
HELD BY ASSOCIATED PERSONS
30.06.09
30.06.08
30.06.09
30.06.08
J S Parker
25,500
17,500
42,950
42,950
A W Baylis
0
0
10,000
10,000
A W Capamagian
0
0
20,000
20,000
J M Cronin
0
0
2,500
2,500
D A Pilkington
0
0
0
0
0
0
40,000
40,000
25,000
25,000
0
0
M J Smith
Sir Dryden Spring
FINANCIAL AND OPERATIONAL FIVE YEAR SUMMARY
AS AT 3 0 J U N E 2 0 0 9
P O RT O F TAU R A N G A L I M I T E D A N D S U B S I D I A RY
The Board approved a final dividend of 18.0 cents per share ($24.1 million) after year end payable on 2 October 2009.
ANNUAL
**Assets were revalued by $189.2 million effective 30 June 2004 and $228.0 million effective 30 June 2007.
OPERATIONAL
Cargo throughput (000 tonnes)
Containers (TEUs)
Net crane rates (container moves per hour)
Ship departures
Berth occupancy (%)
Total cargo ship days in port
Turn-around time per cargo ship (days)
Cargo tonnes per ship
Average cargo ship gross registered tonnage (GRT)
Average cargo ship length overall (metres)
Number of employees – Port of Tauranga Limited
Lost time injuries (LTI)*
Year
2009
13,458
546,521
33.8
1,233
29
1,534
1.3
10,906
21,051
176
156
1.3
Year
2008
13,525
582,072
30.8
1,279
28
1,563
1.3
10,558
19,747
172
154
12.6
Year
2007
12,647
466,235
33.3
1,233
27
1,499
1.3
10,308
18,430
168
152
3.1
Year
2006
12,278
423,138
35.9
1,197
28
1,543
1.3
10,257
18,066
170
156
21.0
Year
2005
12,622
438,214
35.3
1,207
30
1,642
1.4
10,457
17,864
167
159
27.0
*Number of lost time claims per million hours worked.
45
Tauranga
NET CRANE RATE
40
Lyttelton
35
Brisbane
30
Sydney
25
Melbourne
20
Fremantle
15
Adelaide
10
Aust Wgtd Ave
5
*Net crane rate is measured in container moves per hour
0
2nd
2006
3rd
2006
YE A R
REPO RT
*EBITDa is Group profit before income tax plus interest expense plus depreciation and amortisation.
F IVE
PREVIOUS NZGAAP
Year
Year
2006
2005
$000
$000
122,423
145,601
69,908
73,886
31,032
33,654
26,794
26,794
431,434
427,187
197,942
205,781
647,896
650,346
4.1
4.5
66.5
65.7
7.2
7.9
5.35
4.95
716,728
663,141
3.22
3.19
23.2
25.1
OPERATIONA L
Year
2007
$000
129,578
81,852
39,335
28,136
643,311
180,465
873,995
5.0
73.6
7.2
7.04
943,394
4.80
29.4
AND
Revenue
EBITDa *
Surplus after taxation
Dividends paid related to earnings
Total equity
Net interest bearing debt
Total assets
Interest cover (times)
Shareholders’ equity (%)
Return on average equity (%) **
Share price ($)
Market capitalisation ($)
Net asset backing per share ($)
Earnings per share (cents per share)
NZ IFRS
Year
2008
$000
148,808
87,885
42,117
44,231
639,210
200,717
895,426
5.1
71.4
6.6
6.55
877,928
4.77
31.4
20 0 9:FINANCIAL
Year
2009
$000
143,619
89,277
45,185
33,509
643,057
207,484
910,447
5.4
70.6
7.0
6.15
824,314
4.80
33.7
SU M M A RY
FINANCIAL
4th
2006
1st
2007
2nd
2007
3rd
2007
4th
2007
1st
2008
2nd
2008
3rd
2008
4th
2008
1st
2009
2nd
2009
Source: Australian Productivity
Commission, NZ Company Data,
Rockpoint Corporate Finance
A N N UA L R E PO RT 2 009 : 8 7
CORPORATE STRUCTURE
ANNUAL REPORT 2009:CORPORATE STRUCTURE
PORT OF TAURANGA LIMITED
ACTIVITIES
• Provision of wharf facilities
• Land for storage and transit of cargoes
• Berthage, cranes, tug and pilotage services
• Leasing of land and buildings
• Container terminal ownership
• Rail link to Auckland (MetroPort)
50%
50%
50%
METROBOX AUCKLAND
LIMITED
NORTHPORT
LIMITED
C3
LIMITED
25%
NORTH TUGZ
LIMITED
ACTIVITIES
• Storing, cleaning,
ACTIVITIES
• Own and operate
ACTIVITIES
• Owns tugs and
ACTIVITIES
• Log scaling
washing and inspecting
deepwater commercial
operates towage
• Stevedoring
shipping containers
port at Marsden Point
service within the
• Inventory management
Whangarei Harbour
• Receival and delivery
at the Southdown rail
terminal at Auckland
• Warehousing
• On-wharf marshalling
• Devanning and
consolidating
containers/bases
• Road transport
• Materials handling
• Vessel agency
• Thirteen ports in
New Zealand and three
log yards
COMPANY DIRECTORY
DIRECTORS
AUDITORS
J S Parker
Chairman
KPMG
Tauranga
A W Baylis
A W Capamagian
J M Cronin
D A Pilkington
SOLICITORS
Holland Beckett
Tauranga
M J Smith
Sir Dryden Spring
EXECUTIVE
M C Cairns
Chief Executive
S G Gray
Chief Financial Officer
T H James
Corporate Services Manager
G J Marshall
Commercial Manager
A P Reynish
Property Manager
BANKERS
ANZ National Bank Limited
Bank of New Zealand
Commonwealth Bank
SHARE REGISTRY
For enquiries about share transactions, change of
address or dividend payments contact:
Link Market Services Limited
PO Box 91976
Victoria Street West
Auckland 1142
Telephone .....09 375 5998
Facsimile ........09 375 5990
Email [email protected]
REGISTERED OFFICE
Salisbury Avenue
Mount Maunganui
Private Bag 12504
Tauranga Mail Centre
Tauranga 3143
New Zealand
Telephone ......07 572 8899
Facsimile ........07 572 8800
Internet .........www.port-tauranga.co.nz
Email [email protected]
FINANCIAL CALENDAR
2 October 2009 .............Final dividend payment
22 October 2009 ..........Annual meeting
25 February 2010 .........Half year results announcement
March 2010 .....................Half year report published
19 March 2010 ...............Interim dividend payment
30 June 2010 ..................Financial year end
19 August 2010 .............Annual results announcement
September 2010 ...........Annual report published
A N N UA L R E PO RT 2 0 0 9 : 8 9
A N N UA L R E PO RT 2 009 : 8 9
NEW ZEALAND’S

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