3 D - porttaranaki.co.nz...The new safety induction video was used to induct 1,100 people for the Port site. The feedback on this improved tool for educating Port users about safety

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20

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AR

An

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NET PROFIT AFTER TAX

OIL AND GAS TRADE VOLUMES

PROPERTY HECTARES

CASH FROM OPERATIONS

DIVIDENDS

71%

27%

40%

44%

34%

REPORT 20131PORT TARANAKI LIMITED

“PROVIDING SUBSTANCE TO TARANAKI’S ECONOMY BY OPERATING A SUCCESSFUL AND SUSTAINABLE BUSINESS”

MISSION STATEMENT OF PORT TARANAKI LIMITED

CONTENTS Highlights 1 Chairman's Report 2 Chief Executive's Report 3 Environmental Report 8 Social Report 9 Company Values 12 Statutory Information 13 Financial Statements 14 Independent Auditor's Report 39 Comparative Review 40 Directory 41

HIGHLIGHTS ‹

A key strategic goal is, and will continue to be, to increase the Port’s land footprint. Berthside land is important to the success of any modern port in order to leverage cargo growth across the wharves. In June 2013, Port Taranaki acquired 18.80ha of land adjacent to the Port from Contact Energy Limited.

The Board acknowledges the contribution of Management and Sta�. Without their contribution the excellent performance of the Company over the past year would not have been achieved. The Company is �rmly on a platform for future growth.

Our Shareholder has continued to provide strong support for the vision of the Company as a critical contributor to the economy of Taranaki and New Zealand.

My appreciation also goes to all Board members, our customers and suppliers. We look forward to continuing our mutually bene�cial and valuable relationships in the year ahead.

Looking forward, Port Taranaki’s prospects remain bright.

JOHN AULD Chairman

Port Taranaki Limited has had an outstanding year reporting growth in net profit after tax of 71.0%. Trade volume grew strongly across several key sectors of the business.The Board places the highest value on health and safety and has had a particular focus on this area during the year. While I am pleased to report that the number of lost time days due to injury is the lowest on record, the Board is committed to “Zero Harm”.

The Company has enjoyed a longstanding relationship with the Taranaki oil and gas exploration and production industry and this has been further strengthened by the signing of a further ten-year Newton King Tanker Terminal Users’ agreement with a consortium of oil and gas exporting companies in April 2013. This new agreement is a signi�cant milestone for the Company and will ensure stability and certainty to Port Taranaki and its customers.

JOHN AULD Chairman

CHAIRMAN'S REPORToil and gas industry in the region. We recognise, however, that we are only as good as yesterday and the safety challenge begins anew tomorrow.

At the beginning of the year, the Port signed a milestone contract with its oil and gas customers for a ten-year wharfage services agreement. This contract is of pivotal importance to the Port as it seeks to enhance the only deep water port on New Zealand’s west coast for the bene�t of its customers and Shareholder. This country’s relative isolation from key markets makes scale in shipping an important factor to the success of our export customers.

With growth comes the need to change to adapt to our new situation. This year has seen the formulation of a new ten-year vision for the Port which has lead onto a new Company structure and the acquisition of more land immediately adjacent to the Port from which to leverage cargo growth.

The recently completed 2012/2013 financial year marked the consolidation of a trend of strengthening volume and profitability for Port Taranaki Limited.

Trade activity increased across bulk liquids, bulk dry cargoes, and log exports for the fourth straight year.

This continued trade growth was accompanied by a further improvement in our health and safety outcomes. This is a credit to Sta� and to their colleagues across all of the Port’s customer and service base. The strong safety culture in many Taranaki workplaces, including the Port, owes its genesis to the

CHIEF EXECUTIVE'S REPORT ‹

REPORT 20133PORT TARANAKI LIMITEDPORT TARANAKI LIMITEDREPORT 20132

PORT TARANAKI LIMITEDREPORT 20134 PORT TARANAKI LIMITED

REPORT 20135

Financial PerformancePort Taranaki Limited continued to report improved �nancial performance in the 2012/2013 year.

Net pro�t after tax rose 71.0% to $7.46m in 2012/2013. The improved result is mainly attributable to the growth in trade volumes during the current �nancial year. Revenue from operations increased 8.9% to $44.96m and operating pro�t increased 40.3% to $12.16m.

Expenses were well controlled, increasing by just 0.6% over the full year.

The operating margin (operating pro�t divided by revenue) improved to 27.1% for the current year against 21.0% in the prior year.

Net �nance expense decreased from $2.30m in 2011/2012 to $1.45m as a result of decreased average borrowing levels during the year.

Debt levels rose only at the end of the �nancial year by $14.50m when 18.80ha of property was purchased from Contact Energy Limited. The property consists of the decommissioned New Plymouth power station.

The Company entered into an interest rate swap agreement to hedge $30million of interest-bearing debt and thereby �xing the interest rate for the next seven years at 3.86%.

Dividends of $2.95m were paid to the Taranaki Regional Council.

The return on average shareholder’s funds (net pro�t after tax divided by average shareholder’s funds) lifted to 7.5% for the current �nancial period (2011/2012:4.9%).

Property, plant and equipment grew by 23.1% to $146.50m. This was primarily the result of the purchase of the Contact Energy land and the revaluation of Port land to market values by $12.36m.

Cash �ows from operations amounted to $15.34m which is 43.7% higher than the previous year. The Company invested $21.93m in �xed asset projects which were partly funded by debt and hence bank borrowings increased by $9.63m to $36.67m as at the end of the year.

Marine Services and Offshore SupportIt was another busy year for the Port’s marine division including o�shore support services.

The tugs were well utilised throughout the year not only during pilotage operations in the Port area but also in the o�shore industry and towage operations. The ‘Rupe’ had hook-ups for AWE New Zealand Pty Limited’s Floating Production Storage and O�oading (FPSO) Umuroa and the ‘Tuakana’ had cargo runs to the Kupe platform for Origin Energy Resources (Kupe) Limited. The Russian �shing vessel ‘Sparta’ was towed from North Cape for repairs.

A new pilot vessel was commissioned to be built by Q-West Boat Builders Limited of Whanganui following the departure of the reserve pilot vessel, ‘Westgate Rescue’.

The dredge ‘Pelican’ successfully undertook a biennial maintenance dredging campaign early in the year.

The Dynamic Under Keel Clearance (DUKC) system was used by 69 vessels to maximise their draft during the period.

MetOcean Solutions Limited was commissioned to develop a Berth Forecasting System to provide a safe berthing management tool to further enhance safety while maximising berthage.

Some marine highlights of the year included:

• Thesmallcruiseliner,‘CaledonianSky’, visiting with over 400 passengers in mid-February.

• Thenavalsupportvessel,'HMNZSEndeavour',cameintoherhomeport in March.

• Thecontainervessel,‘Messologi’,at 294m LOA became the longest vessel ever to visit Port Taranaki.

The Marine Services Manager continued as Taharoa Harbourmaster on behalf of Maritime New Zealand.

Some o�shore projects included:

• AleaseontheEasternReclamationfor the certi�cation and commissioning of the CDCC land rig for Shell Todd Oil Services Limited (STOS) at Kapuni.

• AnexclusivecontractforSTOS on the Breakwater 1 facility until the departure of the ‘Paci�c Chieftain'inearlyMarch.

• PartoftheEasternReclamation was leased to construct stabilisation mattresses for Origin Energy Resources (Kupe) Limited’s pipeline in the Kupe �eld.

• The‘WesternMonarch’andchaseboats ‘Paci�c Parrot’ and ‘Star Keys’ were regular visitors during their seismic campaign in the Taranaki Basin.

• Renovatingnumber1cranein readiness for the upcoming Anadarko campaign and renovating number 3 crane for OMV New Zealand Limited’s occupation of the Breakwater 1 facility.

CHIEF EXECUTIVE'S REPORT ‹ CHIEF EXECUTIVE'S REPORT

Bulk LiquidsBulk liquid trade at Port Taranaki received a substantial boost of 745,000 tonnes or a 27.3% increase over the previous �nancial year. The total volume transferred across the NKTT Wharf in the year was 3.48m tonnes which was 76.2% of the total trade through the Port.

Cargo and LogisticsHighlights included another record year of log exports, up 18% to 323,000 freight tonnes. Bulk dry imports also achieved a record, up from the previous year’s record high by 2.5%, to 545,000 freight tonnes.

More land has been made available for bulk dry imports and for log storage to promote further increases in volumes. The purchase of the power station site provides the potential to handle double the current log throughput from Port Taranaki.

The Port is targeting a larger log catchment area and preparing for the forests that will be ready for harvest over the next �ve years.

Facilities for log exporters continue to be updated. Log storage areas

are being sealed, an automated weighbridge has been installed, and a covered log scaling area has been constructed.

Dry bulk imports support the meat and dairy industries through supplementary feeds and fertilisers. Other grain imports continue to increase.

Executive Management TeamLeft to right: Noel Henderson (Human Resource Manager), John Lehman (Business Services Manager), Roy Weaver

(Chief Executive), and Guy Roper (Commercial Manager). Insert: Bill Edie (Property and Infrastructure Manager).

TOTAL TRADE VOLUMES 2009-2013

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

(000

s ton

nes)

20132012201120102009

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

(000

s ton

nes)

20132012201120102009

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

TEU

20132012201120102009

CONTAINER VOLUMES 2009-2013BULK LIQUIDS 2009-2013


REPORT 20137

SecurityThe new safety induction video was used to induct 1,100 people for the Port site. The feedback on this improved tool for educating Port users about safety and security requirements at Port Taranaki has been very positive.

An average of about 2,900 vehicles per week entered through the port’s security gates or approximately 150,000 vehicles for the year.

The crew shuttle service operated by Security sta� has been very successful in minimising the risk of an accident to pedestrians in the Port area.

Health and Safety• ZeroHarm

The introduction of the "Zero Harm" philosophy under the banner of Safely Home Every Day, or “SHED” as it is known to Sta�, has resulted in a strengthening of safety awareness. This has been borne out by the accident statistics for the year ending 30 June 2013. Port Sta� recorded the lowest number of lost time days due to injury (11) and the second lowest number of accidents (23) since the current recording format was introduced in 1999.

• ACCClaimHistoryFor the year ending 2012, Port Taranaki had New Zealand’s second lowest ACC claim history based on ‘All Ports claim $ per $million payroll’. Port Taranaki has been either the �rst or second lowest for each of the last four years.

The Port’s Health and Safety Co-ordinator was appointed Chairperson of the National Ports Health and Safety Forum. This

forum, which consists of Port and Stevedore personnel, meets quarterly and plays an important role in raising the health and safety bar across all ports.

• DrugandAlcoholPolicyAs part of its safety programme and to maintain best practice health and safety standards, the Company updated its Drug and Alcohol Policy and introduced random testing during the year. Port domiciled Companies were requested to do the same and all now have random testing policies in place. Work is well advanced to implement site wide random testing.

During the year �ve separate random test days were undertaken for Port Taranaki sta�. All tests returned negative readings.

• HealthandWellnessThe Company introduced a wellness programme known as “Tracksuit” during the latter part of the year. “Tracksuit” is a web based programme designed to be fun and informative with a variety of health initiatives, competitions, and resources readily available to participants.

Personnel• SeniorManagementRestructure2012/2013 saw the Port undertake a senior management restructure involving the introduction of three new executive management roles of Commercial Manager (responsible for Marketing and Business Development for Bulk Cargo, Logs, Containers, and Marine and O�shore Services), Business Services Manager (responsible for Accounting and Finance, Information Systems, and Corporate

Services), and Property and Infrastructure Manager (responsible for Infrastructure, Environment, Purchasing, and Property).

The restructure resulted in the two senior manager positions of Chief Financial O�cer and Commercial Manager-Cargo and Logistics being disestablished.

• OurPeopleAs of 30 June 2013, permanent fulltime employees totalled 121. Additional Sta� consisted of seven permanent part-timers, four �xed-term employees and a group of ten casual Sta� who cover for leave and work �uctuations.

Four Port sta� provided consultancy services and advice in their �elds of expertise to external companies.

All those involved in providing consultancy services are seasoned employees and it is pleasing to see that they are recognised as leaders in their respective �elds.

The weekly sta� newsletter “Porttalk” continues to be an eagerly awaited Friday publication.

• TrainingIn order to retain competency levels and to meet regulatory compliance requirements a large amount of ongoing training is mandatory. In addition, Sta� attend training courses to upgrade their skills and knowledge.

A concept of “Above the Line” training was introduced for all Sta� during the year. “Above the Line” generated from the Leadership Transformation Training undertaken during the previous year. The concept provides training for Sta� to relay their feelings, opinions, and expectations in a positive manner.

CHIEF EXECUTIVE'S REPORT ‹ CHIEF EXECUTIVE'S REPORT

GovernanceAt the annual meeting on 26 September 2012, Craig Norgate and Roger Taylor were re-elected as Directors of the Company. Following this meeting, John Auld and Craig Norgate were elected Chairman and Deputy Chairman respectively.

The Board met on nine occasions during the year.

The Board’s Audit Committee comprised Craig Norgate (Chairman), Peter Horton, and Roger Taylor. They met on three occasions during the year.

The Board’s Personnel Committee met on one occasion. The committee comprised John Auld (Chairman), Richard Krogh, David MacLeod, and Craig Norgate.

As provided by section 42 of the Company’s constitution, John Auld and Peter Horton retire by rotation at the upcoming twenty-�fth annual meeting of the Company and, being eligible, o�er themselves for re-election.

OutlookThe outlook for the 2013/2014 year is one of continued growth in cargo throughput, driven primarily by the recommissioning of Methanex’s Waitara Valley methanol plant in September 2013. Overall trade through Port Taranaki is anticipated to rise to over 5.00m tonnes in 2013/2014 from 4.57m tonnes in the previous year.

The year ahead will also be very busy for the o�shore servicing activity by the Port Taranaki marine

and cargo teams. A total of 19 new exploration and development holes are programmed across a wide variety of prospects. O�shore drilling rigs due in Taranaki waters this year include the semi-submersible rig Kan Tan lV, the jack-up rig Ensco 107, and the drill ship Noble Bob Douglas.

A major focus for the year ahead will be on property and infrastructure developments related to the recently purchased power station site. The site, once redeveloped, will o�er a number of opportunities for bulk dry and bulk liquid customers and additional laydown area for log exporters.

ROY WEAVER Chief Executive

Left to right: Roger Taylor, Peter Horton, David MacLeod, John Auld (Chairman), Richard Krogh, and Craig Norgate (Deputy Chairman).

PORT TARANAKI LIMITEDREPORT 20139REPORT 2013

PORT TARANAKI LIMITED 8

Environmental PolicyPort Taranaki places a high value on the quality and long term sustainability of the environment in which it operates. Accordingly, Port Taranaki gives a commitment to its stakeholders ensuring that its activities are conducted in a manner that will avoid, remedy, or mitigate, to the most practical extent, any adverse e�ect on the environment.

IncidentsThe following table sets out the environmental incidents during the current year compared to the previous year, captured by the Company’s incident reporting system.

The two discharge to land incidents were a minor diesel spill and a minor methanol spill that were readily cleaned up.

One discharge to water incident and the related non-compliance notice was for high suspended solids in stormwater discharge. The other was a minor hydraulic oil spill from a ship.

The discharge to air incident related to methanol vapour emitted from a ship during methanol loading operations.

The �rst noise incident was a complaint from a neighbour that was traced to diesel generators on train wagons parked to the south of the Port Taranaki Centre as the most likely cause. The second noise incident was a complaint from a neighbour about a noise that was traced to a methanol ship venting system. This issue is being addressed through the customer and charterer of the vessel.

Key Performance Indicators(1) Non-Compliance Notices for Port Taranaki’s Activities

There was one non-compliance notice issued to Port Taranaki Limited during the year under review. An Infringement Notice regarding high suspended solids in stormwater discharge was issued.

(2) Ngamotu Beach Water Quality

The Taranaki Regional Council (TRC) sampled the water quality at Ngamotu Beach on 20 occasions during the period from 1 November 2012 to 27 March 2013 and there was full compliance with bathing water quality standards.

(3) Marine Pollution Incidents

There were no marine pollution incidents except as noted above.

Compliance Monitoring and State of the EnvironmentThe TRC continued its programme of stormwater discharge sampling and testing. On 17 April 2013, the suspended solids content of the stormwater at three sampling points exceeded the resource consent limit of 100 mg/100 litres and an Infringement Notice was issued.

Improvement InitiativesWith the change from being primarily a hydrocarbon and container port to one that handles a large volume of bulk dry cargo including logs, fertilisers, and animal feeds, Port Taranaki is committed to e�ectively managing the challenges of dust from ship unloading and suspended solids in stormwater. This year was highlighted by:

• Investmentofapproximately$1.8minthepavingofunpaved storage areas to mitigate the risk of suspended solids in stormwater and to reduce dust propagation.

• Improvementsinlogyardcleaningtomitigatetheriskofsuspended solids in stormwater.

• Continuinginstallationofstormwatertreatmentequipment to mitigate the risk of suspended solids in stormwater.

• Commissioningoftwonewreplacementhopperstoreduce the risk of dust propagation from bulk dry cargo unloading operations.

• ReviewoftheEnvironmentalManagementPlan.

INCIDENT TYPE INCIDENTS INCIDENTS NON-COMPLIANCE LAST YEAR THIS YEAR NOTICES THIS YEAR

DISCHARGE TO LAND 5 2 NONE

DISCHARGE TO WATER 1 2 ONE

DISCHARGE TO AIR 1 1 NONE

NOISE 2 2 NONE

OTHER 0 0 NONE

TOTAL 9 7 ONE

SponsorshipsSponsorships during the year included:-

• Community–NgatiTeWhiti–internationalrelationshipworking party trip to Japan, Port ViewBowlingClub25thjubilee,DepartmentofConservation’s“Seaweek2012”,EastTaranakiEnvironmentalClub–raisingawareness with Sparky the kiwi, and Taranaki Arts Festival for the production”Traces”inAugust2013.

• Sporting–FlannaganCupOpenWater Swim, New Plymouth Aquatics Swimming Club, New Plymouth Board Riders Club (Juniors), New Plymouth Yacht Club (juniors), Taranaki Multisport and Triathlon Club, Taranaki Rugby Football Union, Taranaki Secondary School’s Rowing, Taranaki Surf Lifesaving organisations, and Taranaki Windsur�ng Club.

• Business–CharteredInstituteofLogisticsandTransport(CILT),DeloitteAnnualEnergyExcellenceAwards(OverallEnergyCompany

oftheYearcategory),2013WestpacTaranakiChamberofCommerceBusinessExcellenceAwards(ExcellenceinServicetotheEnergyIndustrycategory),EngineeringTaranaki Apprenticeship Awards, TaranakiChamberofCommerce,TaranakiFederatedFarmers’annualconference,andWhanganuiRegional Business Awards.

• Employees–membersofMoturoaToastmasters’ Club and an employee to attend the Masters Games.

Port Taranaki Limited continued to support its major stakeholders during the year

Community• Paiddividendsof$2.95mtosole

shareholder, Taranaki Regional Council.ThedividendisusedtooffsetTaranakiRegionalCouncilrates for the bene�t of the people of the region.

• Providedpeppercornleaserentalsto New Plymouth District Council and Department of Conservation and discounted lease rentals to community organisations.

• Providedandmaintainedfreeaccessto public areas including the boat

ramp,jetties,andcar/boattrailerparking at the Lee Breakwater.

• Continuedtoconsultwiththe New Plymouth District Council and Ngati Te Whiti Hapu Society Incorporated on the development and management of the recreational areas in the vicinity of Ngamotu BeachthroughtheNgamotu–PortTaranaki Liaison Group.

• Providedlawn-mowingservicesatWaitapuCemetery,BaylyRoad,forWaitapuUrupaTrusteesandmeetingfacilitiestoNgatiTeWhitiHapu for their monthly meetings.

• Providedthevenueforcommunityactivities including 2013 Police Waka Ama Nationals, Taranaki Triathlon Club, Splash and Dash events, Flannagan Cup, Methanex Family Fun Ride, Port to Park Fun Run/Walk, Weetbix Kids TRYathlon, New Plymouth Half Ironman, beach volleyball series, and various other events.

• Conductedporttours,gavepresentations, and provided facilities to various community groups includingMoturoaToastmasters’Club.

ENVIRONMENTAL REPORT SOCIAL REPORT ‹


REPORT 201311

SOCIAL REPORT ‹

• Continuedtoprovideforumsfordiscussiononport-relatedmattersincluding environmental, health and safety, risk management, and security through the Port Taranaki Safety Advisory Group, Port Taranaki Security Committee,andtheNKTTUsers’ Safety Group.

• Providedvenueforportrelatedmeetings/forums including the O�shore Employers’ Group.

• ContinuedtobeanactivememberoftheTaranakiTransportNetworkGroup.

• PublishedthreeissuesofthePortTaranaki magazine, ‘PORTAL’, with feature articles on customers.

• ChiefExecutivecontinuedasatrusteeofVentureTaranakiEconomicDevelopment Agency and was PresidentoftheCharteredInstitute ofLogisticsandTransport(CILT).

• ManagerPetrochemicalsandSecuritycontinued as Chairman of the Oil and Gas Specialist Technologies Group and a Board member of the Taranaki Chamber of Commerce.

• PropertyandInfrastructureManagerwas a Board member of the EngineeringTaranakiConsortium.

• Conductedporttoursandmadepresentations to customers.

• HostedPortTaranakiLimitedShippersandExportersGolfTournamentandTaranakiITMCuprugbygames.

• HostedthreePetroleumExploration and Production Association (PEPANZ) visits.

• HostedavisitbytheMinistryofForeignAffairsandTrade’s‘HeadsofMissions’toSaudiArabia,TheNetherlands,RussiaandEastTimor.

Customers

“Port Taranaki has always been

at the forefront of innovating leading

technology.”Peter McCoombe, MetOcean Solutions

• Publishedtheweeklystaffnewsletter,‘PortTalk’,andthequarterly health and safety newsletter.

• ChiefExecutivemadea“Stateof the Nation” presentation to all available sta�.

• ContinuedtheavailabilityofEAPServices Limited to sta� and their families.

• WorkcontinuedonbringingtheCompany Values "to life" by engaging sta� with the values and embedding them into organisational processes.

• Offeredfluinjectionsandhearingtests to all sta�.

• Continuedtoprovidegroupmedical insurance schemes, a subsidised superannuation scheme and Kiwisaver, and the “Westpac Employee Pac”.

• Socialcluborganisedarangeofactivities for sta� and their families.

• Retirementseminarheldfor eligible sta�.

• Twoemployeesattended“Discovery”coursesatAnakiwaunder the John Young Memorial Outward Bound Scholarship.

Employees

PROVIDED SOCIAL CLUB

FACILITIES AND AN ONSITE

GYMNASIUM

SOCIAL REPORT

“I just love this job, it is brilliant; the lifestyle and the

varied work, the best of both worlds.”

Adam Eager, Pilot

COMPANY VALUES STATUTORY INFORMATION ‹

13 REPORT 2013PORT TARANAKI LIMITEDPORT TARANAKI LIMITED

REPORT 201312

Statutory InformationComparison of Performance with Statement of Corporate Intent

As required under section 16 (4)(a) of the Port Companies Act 1998, a comparison of the performance targets in the Statement of Corporate Intent for the period 1 July 2012 to 30 June 2015 against the actuals for 2012/2013 is shown below:

2012/2013 Target Actual Achieved

Financial:Returnonaveragetotalassets(NPAT/ATA) 4.79% 5.30% YesReturnonaverageshareholder’sfunds(NPAT/ASF) 6.66% 7.48% Yes

Non-financial:WharfUtilisation(berthoccupancy)

Moturoa1and2 30-45% 25% No NewtonKingTankerTerminal 20-35% 28% Yes Blyde1and2 15-30% 15% Yes MainBreakwater 30-50% 54% Exceeded

Moturoa wharf did not meet target utilisation due to the availability of the Main Breakwater for o�shore support vessels.

Logos were designed to reinforce the Company Values.

REPORT 2013PORT TARANAKI LIMITED 14 REPORT 2013

PORT TARANAKI LIMITED 15REPoRt 2013PoRt tARANAKI LIMItED 1

Statement of Pro�t or Loss and Other Comprehensive Income

FOR THE YEAR ENDED 30 JUNE 2013 2013 2012 NOTE NZ$ NZ$

Continuing operations

Revenue from operations 2 44,958,224 41,281,264

Operating expenses 2 (32,796,703) (32,612,896)

Operating pro�t before �nance income and expenses 12,161,521 8,668,368

Finance income 2 7,692 22,511

Finance expenses 2 (1,461,922) (2,318,561)

Net �nance expense (1,454,230) (2,296,050)

Pro�t Before Taxation 10,707,291 6,372,318

Income tax expense 3 (3,244,453) (2,008,310)

Pro�t from continuing operations 7,462,838 4,364,008

Pro�t for the period (attributable to owners of the company) 7,462,838 4,364,008

Other comprehensive income (items that may be reclassi�ed subsequently to pro�t or loss when speci�c conditions are met)

Revaluation of property, plant and equipment 15 12,364,969 -

Change in cash �ow hedge reserve 18 634,366 -

Other comprehensive income for the period, net of income tax 12,999,335 -

Total comprehensive income for the period (attributable to owners of the company) 20,462,173 4,364,008

Statement of Changes in Equity

FOR THE YEAR ENDED 30 JUNE 2013

Note Issued Retained Revaluation Cash Flow Hedge Total Capital Earnings Reserve Reserve Equity NZ$ NZ$ NZ$ NZ$ NZ$

As at 1 July 2011 26,000,000 26,271,740 36,611,833 - 88,883,573

Changes in equity for 2012

Pro�t and total comprehensive income for the period - 4,364,008 - - 4,364,008

Dividends 17 - (2,200,000) - - (2,200,000)

As at 30 June 2012 26,000,000 28,435,748 36,611,833 - 91,047,581

Changes in equity for 2013

Pro�t and total comprehensive income for the period - 7,462,838 12,364,969 634,366 20,462,173

Dividends 17 - (2,950,000) - - (2,950,000)

As at 30 June 2013 26,000,000 32,948,586 48,976,802 634,366 108,559,754

FINANCIAL STATEMENTS ‹

The accompanying notes form part of these �nancial statements.

FINANCIAL STATEMENTS

REPoRt 2013PoRt tARANAKI LIMItED 1

FINANCIAL STATEMENTS ‹


Statement of Financial Position

AS AT 30 JUNE 2013 2013 2012 NOTE NZ$ NZ$

Current Assets

Cash and cash equivalents 6 530,852 461,532

Trade and other receivables 7 4,542,278 6,605,456

Prepayments 226,908 54,822

Inventories 8 470,002 462,849

5,770,040 7,584,659

Non Current Assets

Other intangible assets 10 841,104 1,226,205

Property, plant and equipment 9 146,503,121 119,011,103

Derivative �nancial instruments 18 634,366 -

147,978,591 120,237,308

Total Assets 153,748,631 127,821,967

Current Liabilities

Trade and other payables 11 3,367,979 3,546,612

Provisions 12 1,578,444 1,529,318

Borrowings 13 44,438 215,839

Taxation payable 4 1,012,354 1,446,266

6,003,215 6,738,035

Non Current Liabilities

Deferred tax liability 5 881,912 1,214,601

Borrowings 13 36,668,750 27,043,750

Trade and other payables 11 663,000 824,000

Provisions 12 972,000 954,000

39,185,662 30,036,351

Equity

Issued capital 14 26,000,000 26,000,000

Asset revaluation reserve 15 48,976,802 36,611,833

Cash �ow hedge reserve 18 634,366 -

Retained earnings 16 32,948,586 28,435,748

108,559,754 91,047,581

Total Equity and Liabilities 153,748,631 127,821,967

For and on behalf of the Board

Director Director

Dated 15 August 2013


PORT TARANAKI LIMITED 17 REPoRt 2013PoRt tARANAKI LIMItED 1

GENERAL ACCOUNTING POLICIES

Port Taranaki Limited (the "Company") is a sea port company incorporated under the Companies Act 1993 and domiciled in New Zealand.

The Company's parent and sole shareholder is The Taranaki Regional Council.

The Company's registered o�ce is 2 - 8 Bayly Road, Moturoa, New Plymouth 4310.

The �nancial statements for the Company were authorised for issue by the directors on 15 August 2013.

The principal activities of the port are described in Note 1.

Statement of Compliance

These are the �nancial statements of the Company presented in accordance with the Port Companies Act 1988 and the Companies Act 1993, prepared in accordance with the Financial Reporting Act 1993, and in accordance with New Zealand generally accepted accounting practice (NZ GAAP). They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS), International Financial Reporting Standards (IFRS) and other applicable Financial Reporting Standards. The Company is a pro�t oriented entity.

Basis of Preparation

The �nancial statements are presented in New Zealand dollars, which is the Company's functional and reporting currency, rounded to the nearest dollar.

They are prepared on the historical cost basis apart from certain assets which are stated at their fair value.

The accounting policies set out below have been applied consistently to all periods presented in these �nancial statements. SIGNIFICANT ACCOUNTING POLICIES

(a) Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments. Bank overdrafts are shown within current liabilities in the balance sheet.

(b) Foreign Currency Monetary Balances

Transactions in foreign currencies are converted at the exchange rate ruling at the date of the transaction. At balance date all foreign currency monetary assets and liabilities are translated to New Zealand dollars using the prevailing spot rate of the day. Any gain or loss is recognised in the pro�t or loss in the reported �nancial period in which they arise.

(c) Financial Instruments

(c) (i) Derivatives

A derivative is a �nancial instrument or contract whose value changes in response to the change in a speci�ed interest rate, �nancial instrument price, commodity price, foreign exchange rate, credit index or other variable. It requires no or a nominal initial investment and is settled at a later date.

During the year the Company changed its policy on derivative �nancial instruments. The Company will now

be hedge accounting for derivative instruments qualifying as a cash�ow hedge. The change in policy will have no �nancial e�ect in the current or prior periods as there were no derivative instruments in place as at the prior period end.

The Company uses derivative �nancial instruments to hedge its exposure to foreign exchange, commodity and interest rate risks arising from operational, �nancing and investment activities. The Company does not hold or issue derivative �nancial instruments for trading purposes. Derivatives that do not qualify for hedge accounting are accounted for as trading instruments.

The Company may enter into foreign currency forward exchange contracts, to hedge foreign currency transactions when purchasing major �xed assets and when payment is denominated in foreign currency. Gains and losses on such contracts are recognised in the pro�t or loss each year at balance date or date of completion by restating the liability to fair value at balance date or at the time of settlement.

Cash Flow Hedges

Changes in the fair value of the derivative hedging instrument designated as a cash �ow hedge are recognised directly in the equity to the extent that the hedge is e�ective. To the extent that the hedge is ine�ective, changes in fair value are recognised in the pro�t or loss with �nance expenses.

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 the hedging reserve remains there until the forecast transaction occurs. When the hedged item is a non�nancial asset, the amount recognised in the hedging reserve is transferred to the carrying amount of the asset when it is recognised. In other cases the amount recognised in the hedging reserve is transferred to the pro�t or loss in the same period that the hedged item a�ects the pro�t or loss.

At year end the Company had one derivative �nancial instrument in place as per Note 18 (2012: Nil).

(c) (ii) Financial Assets and Liabilities

Financial Assets

Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs. Subsequent to initial recognition, investments in associates are accounted for under the equity method in the �nancial statements. Other �nancial assets are classi�ed into the following speci�ed categories: �nancial assets 'at fair value through the pro�t or loss', 'held to maturity investments', 'available for sale' �nancial assets, and 'loans and receivables'. The classi�cation depends on the nature and purpose of the �nancial assets and is determined at the time of initial recognition.

STATEMENT OF ACCOUNTING POLICIES ‹


Statement of Cash Flows

FOR THE YEAR ENDED 30 JUNE 2013 2013 2012 NOTE NZ$ NZ$

Cash Flows From Operating Activities

Receipts from customers 53,871,659 45,195,598

Interest received 7,635 22,678

53,879,294 45,218,276

Payments to suppliers and employees (32,890,879) (29,788,769)

Interest paid (1,633,323) (2,592,346)

Income tax paid (4,011,055) (2,161,623)

(38,535,257) (34,542,738)

Net cash provided by operating activities 19 15,344,037 10,675,538

Cash Flows From Investing Activities

Sale of property, plant and equipment and software (net of disposal costs) 33,105 345,398

33,105 345,398

Purchase of property, plant and equipment and software (21,934,821) (2,952,630)

Capitalised interest on purchase of property, plant and equipment (48,000) -

(21,982,821) (2,952,630)

Net cash (used in)/provided by investing activities (21,949,716) (2,607,232)

Cash Flows From Financing Activities

Proceeds from borrowings 9,625,000 -

Repayment of borrowings - (8,401,372)

Interim dividend (1,500,000) (1,250,000)

Final dividend (1,450,000) (950,000)

Net cash (used in)/provided by �nancing activities 6,675,000 (10,601,372)

Net Increase/(Decrease) in Cash and Cash Equivalents 69,320 (2,533,066)

Cash and Cash Equivalents at the Beginning of Year 461,532 2,994,598

Cash and Cash Equivalents at the End of Year 6 530,852 461,532


STATEMENT OF ACCOUNTING POLICIES ‹FINANCIAL STATEMENTS



is credited to a revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense in the pro�t or loss, in which case the increase is credited to the pro�t or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of land is charged as an expense in the pro�t or loss to the extent that it exceeds the balance, if any held in the revaluation reserve relating to a previous revaluation of that asset. On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the revaluation reserve, is transferred directly to retained earnings.

After recognition as an asset, an item of property, plant and equipment other than land shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses.

Maintenance Dredging

The cost of maintenance dredging incurred is expensed over the period of bene�t through to the commencement of the next dredging campaign. The value of the unexpired portion of maintenance dredging at balance date is re�ected in property, plant and equipment.

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 the future economic bene�ts associated with the item will �ow to the Company and the cost can be measured reliably. All other costs are charged to the pro�t or loss during the �nancial period in which they are incurred.

(f ) Intangibles

Intangible assets acquired by the Company comprise computer software and are stated at cost less accumulated amortisation and impairment losses.

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene�ts embodied in the speci�c asset to which it relates. All other expenditure is expensed as incurred.

(g) Impairment of Non Financial Assets

Assets are reviewed for impairment at each reporting date for events or changes in circumstances that indicate that the carrying amount may not be recoverable. An impairment loss is determined as the amount by which the asset's carrying value 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, assets are grouped at the lowest levels for which there are separately identi�able cash in�ows (cash generating units).

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash �ows are discounted to their present value using a pre-tax discount rate that re�ects current market assessments of the time value of money and the risks speci�c to the assets for which the estimates of future cash �ows have not been adjusted. If the recoverable amount of an asset (or cash-generating

unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the pro�t or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in the pro�t or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

(h) Employee Bene�ts

(h) (i) Long Term Bene�ts

The Company's net obligation in respect to future bene�ts that can extend up to the date of retirement for all existing employees are long term bene�ts. They relate to bene�ts that employees have earned in return for their service in the current and prior periods, although they may or may not have vested at balance sheet date. The obligation is calculated using an actuarial method and is discounted to its present value. The discount rate the Company uses is the market yield on long term New Zealand Government bonds as at balance sheet date. The probability of the Company's obligation to pay the future bene�t is then determined actuarially.

Long term employee bene�ts for the Company include: Long service leave, and retirement allowances.

Long Service Leave

The Company has long service milestones of 15, 25, 30 and 35 years of service. Leave entitlement accrued towards milestones not yet achieved are calculated in accordance with the long term bene�ts policy. No bene�t is payable to an employee upon leaving the Company for any milestone worked towards but not achieved, however the probability of attaining vested status is determined and applied in calculating the expected liability amount.

Retirement Allowance

The Company has a retirement policy in place which provides for a retirement allowance. Actuarial calculations are made to assess both the amount projected to be paid (in accordance with the Company's policy) and the probability that the employee will qualify for the allowance.

(h) (ii) Post Employment Bene�ts

De�ned Bene�t Plans

The Company is a participating employer in the National Provident Fund De�ned Bene�t Plan Contributors Scheme ("the Scheme") which is a multi-employer de�ned bene�t scheme. If the other participating employers ceased to participate in the Scheme, the employer could be responsible for the entire de�cit of the Scheme (see note 26). Similarly, if a number of employers ceased



Financial Assets at Fair Value Through Pro�t or Loss

A �nancial asset may be designated as at fair value through pro�t or loss upon initial recognition if:

a) such designation eliminates or signi�cantly reduces a measurement or recognition inconsistency that would otherwise arise; or

b) the �nancial asset forms part of a group of �nancial assets or �nancial liabilities or both, which is managed and its peak performance is evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

c) it forms part of a contract containing one or more embedded derivatives and NZ IAS 39 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract (asset or liability) to be designated at fair value through pro�t or loss.

Financial assets at fair value through pro�t or loss are stated at fair value, with any resultant gain or loss recognised in pro�t or loss. The net gain or loss recognised in pro�t or loss incorporates any dividend or interest earned on the �nancial asset. Fair value is determined in the manner described in note 18.

Loans and Receivables

Trade receivables, loans, and other receivables that have �xed or determinable payments that are not quoted in an active market are classi�ed as 'loans and receivables'. Loans and receivables are measured at amortised cost using the e�ective interest method less impairment.

Interest is recognised by applying the e�ective interest rate.

Impairment of Financial Assets

Financial assets, other than those at fair value through pro�t or loss are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the �nancial asset, the estimated future cash �ows of the investment have been impacted.

For �nancial assets, objective evidence of impairment could include:

a) signi�cant �nancial di�culty of the issuer or counterparty; or

b) default or delinquency in interest or principal payments; or

c) it is becoming probable that the borrower will enter bankruptcy or �nancial re-organisation.

Certain categories of �nancial assets, such as trade receivables, that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables includes the Company's past experience of collecting payments, as well as observable changes in national or local economic conditions that correlate with default on receivables and expected

uncollectible items.

For �nancial assets carried at amortised cost, the amount of the impairment is the di�erence between the asset's carrying amount and the present value of estimated future cash �ows, discounted at the �nancial asset's original e�ective interest rate.

The carrying amount of the �nancial asset is reduced by the impairment loss directly for all �nancial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written o� against the allowance account. Subsequent recoveries of amounts previously written o� are credited o� against the allowance account. Changes in the carrying amount of the allowance account are recognised in pro�t or loss.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through pro�t or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Other Financial Liabilities

Other �nancial liabilities, including borrowings, and trade and other payables are initially measured at market value, net of transaction costs.

Other �nancial liabilities are subsequently measured at amortised cost using the e�ective interest method, with interest expense recognised on an e�ective yield basis.

The e�ective interest method is a method of calculating the amortised cost of a �nancial liability and of allocating interest expense over the relevant period. The e�ective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the �nancial liability, or, where appropriate, a shorter period, to the net carrying amount of the �nancial liability.

(d) Inventories

Stocks of maintenance materials and supplies are valued at the lower of weighted average cost or net realisable value.

(e) Property, Plant and Equipment

Owned Assets

All items of property, plant and equipment except land are stated at cost less accumulated depreciation and impairment.

After recognition as an asset at date of transition to NZ IFRS an item of land whose fair value can be measured reliably is carried at a revalued amount, being its value at the date of the revaluation less any subsequent accumulated impairment losses. Revaluations are made with su�cient regularity to ensure that the carrying amount does not di�er materially from that which would be determined using fair value at balance date.

Any revaluation increase arising on the revaluation of land

STATEMENT OF ACCOUNTING POLICIES ‹STATEMENT OF ACCOUNTING POLICIES



settled, based on those tax rates which are enacted or substantively enacted at balance sheet date.

The measurement of deferred tax liabilities and assets re�ects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Current and deferred tax is recognised as an expense in the pro�t or loss except when it relates to items of other Comprehensive Income. Deferred taxation assets and liabilities can be o�set when they relate to income taxes levied by the same taxation authority.

(m) Dividends

Provisions for dividends are recognised in the period in which they are authorised and approved.

(n) Goods and Services Tax (GST)

All items in the Statement of Financial Position are stated exclusive of GST with the exception of receivables and payables, which include GST. All items in the Statement of Comprehensive Income are stated exclusive of GST. Cash �ows are included in the Statement of Cash Flows on a gross basis. The GST component of cash �ows arising from investing and �nancing activities which is recoverable from, or payable to the taxation authority is classi�ed as operating cash �ows.

(o) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable.

Rendering of services

The Company recognises revenue for the rendering of services when the amount can be measured reliably, it is probable that the economic bene�ts associated with the transaction will �ow to the entity, the transaction can be measured reliably and the costs incurred or to be incurred can be measured reliably.

Interest Revenue

Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the e�ective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the �nancial asset to that asset's net carrying amount.

(p) Research and Development

Expenditure on research activities, undertaken with the prospect of gaining new scienti�c or technical knowledge and understanding, is recognised in the pro�t or loss when incurred. Expenditure on developing the application of any research �ndings will only be capitalised if able to demonstrate all of the following conditions: It is technically feasible to complete so it will be available for sale or use, intended to be completed, able to be used or sold, will generate probable future economic bene�ts, there are adequate technical, �nancial and other resources to complete the development to use or sell, and can be measured reliably during its development.

(q) Borrowing Costs

The Company recognises as an expense within the pro�t or loss all borrowing costs incurred, with the exception of

interest costs incurred during construction/assembly of major capital projects, which are capitalised as part of the initial cost of the respective assets.

(r) Depreciation

Property, plant and equipment other than land are depreciated on a straight-line basis over their estimated useful lives.

Depreciation periods are:

Buildings 5 to 45 years Port installations 5 to 66 years Plant, equipment and �ttings 2.5 to 25 years Floating plant 3 to 25 years Bulk tanks 5 to 25 years Maintenance dredging 2 years Capital dredging 50 years

The residual values, and the useful lives of assets are reviewed at least annually and, if expectations di�er from previous estimates, the change shall be accounted for as a change in accounting estimate in accordance with NZ IAS 8.

(s) Amortisation

Amortisation is charged to the pro�t or loss on a straight-line basis over the estimated useful life of the intangible assets unless the estimated useful life is inde�nite. There are no inde�nite life intangible assets held at balance sheet date. Other intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:

Computer software 2 to 5 years

(t) Operating Leases

An operating lease is one where the lessor retains signi�cant risks and rewards of ownership of the leased asset.

(i) Payments made under operating leases are recognised in the pro�t or loss on a straight-line basis over the term of the lease, except where another systematic basis is more representative of the time pattern in which economic bene�ts from the leased asset are consumed.

(ii) Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

(u) Statement of Cash Flows

Cash �ows from operating activities are presented using the direct method.

De�nitions of terms used in the Statement of Cash Flows:

- Cash means cash on deposit with banks, net of outstanding bank overdrafts.

- Investing activities comprise the purchase and sale of property, plant and equipment, investment properties and investments.

- Financing activities comprise the change in equity and debt capital structure of the Company and the payment of cash dividends.

- Operating activities include all transactions and events that are not investing or �nancing activities.



to participate in the Scheme, the employer could be responsible for an increased share of the de�cit.

The Company treats payments as expenses when incurred, similar to the treatment for de�ned contribution schemes as su�cient information is not available to use de�ned bene�t accounting.

(h) (iii) Short Term Bene�ts

Short term bene�ts represent the Company's net obligation with respect to bene�ts for services performed that are expected to be paid in the ensuing 12 months. These accruals are calculated based on existing remuneration rates expected to be in place when the bene�ts are paid.

Short term employee bene�ts for the Company include: vested leave, sick leave, long service leave and retirement allowance provision.

Vested Leave

Where an employee has rendered service to the Company and has attained the right to paid leave, the undiscounted amount expected to be paid, is recognised as a current liability as all accumulated leave is expected to be used within 12 months of balance sheet date. The remuneration rates expected to be in place when the bene�ts are paid is applied to the time owed for entitlements to holiday pay earned, and alternate days owing where statutory days have been worked, and long service leave where the milestone has been achieved.

Sick Leave

The Company measures the amount of additional payments that are expected to arise solely from the fact that the bene�t accumulates. The accrual is for the amount estimated it will cost the Company for any employee taking leave in excess of their annual entitlement. It is calculated based on the average expected daily rate of all employees, and the actual average number of sick days taken collectively by employees in excess of annual entitlement in the previous three years.

The current portion of the sick leave provision, the long service leave provision, vested annual leave and retiring allowance provision are presented as current employee bene�t provisions.

(i) Provisions

A provision is recognised in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an out�ow of economic bene�ts will be required to settle the obligation. If the e�ect is material, provisions are determined by discounting the expected future cash �ows at a pre-tax rate that re�ects current market assessments of the time value of money and, where appropriate, the risks speci�c to the liability.

(j) Trade and Other Payables

Trade and other accounts payable are recognised when the Company becomes obliged to make future payments resulting from the purchase of goods and services. Subsequent to initial recognition, trade payables and other accounts payable are recorded at amortised cost.

Given the nature of these liabilities amortised cost equals their notional principal.

ACC

As a port operator, the Company is liable to pay residual claims levies to the ACC. As at balance date the ACC actuary advises that the residual claims fund is expected to be fully funded by 2019. An accrual is made at balance date re�ecting the estimated amount payable through to 2019 based upon current residual levy rates. The assessed �gure is discounted at the 10 year government bond rate to determine the �nal provision.

The current and non current portions of the ACC accrual is presented as trade and other payables.

(k) Interest Bearing Borrowings

All loans and borrowings are initially recognised at fair value, net of transaction costs. Subsequent to the initial recognition, loans and borrowings are carried at amortised cost with any di�erence between the initial recognised amount and the redemption value being recognised in the pro�t and loss over the period of the borrowing using the e�ective interest method, except that they are capitalised in accordance with (q) below.

All interest bearing borrowings are measured at amortised cost using the e�ective interest rate method which allocates the cost through the expected life of the borrowing. Amortised cost is calculated taking account of any establishment costs.

Borrowings are classi�ed as current liabilities (either advances and deposits or current portion of term debt) unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

(l) Income Tax

Income tax on the pro�t or loss for the year comprises current and deferred tax. Income tax is recognised in the pro�t or loss except to the extent that it relates to items of other Comprehensive Income, in which case it is recognised in other Comprehensive Income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the comprehensive balance sheet liability method, for temporary di�erences between the carrying amount of assets and liabilities for �nancial reporting purposes and the amounts used for taxation purposes. Deferred taxation assets attributable to tax losses or deductible temporary di�erences are recognised when realisation is probable. Deferred taxation liabilities attributable to taxable temporary di�erences are amounts of income taxes payable in future periods. However, deferred tax assets and liabilities are not recognised if the temporary di�erences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which a�ects neither taxable income nor accounting pro�t. Deferred tax assets and liabilities are calculated using the tax rates expected to apply when the assets are recovered or liabilities

STATEMENT OF ACCOUNTING POLICIES ‹STATEMENT OF ACCOUNTING POLICIES



Notes to and forming part of the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013

1 PRINCIPAL ACTIVITIES

The Company facilitates export and import activites through Port Taranaki.

2013 2012 NZ$ NZ$

2 PROFIT FROM OPERATIONS

(a) Revenue

Port operating revenue from sale of services 41,945,107 38,078,318

Lease and rental revenue 3,013,117 3,202,946

44,958,224 41,281,264

Interest revenue 7,692 22,511

Total revenue 44,965,916 41,303,775

(b) Pro�t before taxation

Pro�t before tax for the year has been arrived at after

charging the following:

Employee bene�ts 11,965,570 11,568,548

Employee bene�ts - termination 213,866 36,509

De�ned contribution plans 794,953 706,860

Cost of services used 2,301,699 2,277,053

General expenses 3,634,961 4,047,901

Finance costs 1,461,922 2,318,561

Maintenance dredging - depreciation (note 9) 1,040,454 1,020,499

Maintenance dredging other costs 5,078 30,687

Repairs and maintenance 6,624,440 5,999,413

Depreciation and amortisation (notes 9 and 10) 6,199,091 6,612,496

(excludes maintenance dredging)

Net loss on disposal of property, plant and equipment 16,592 312,930

34,258,625 34,931,457

Included in General expenses were the following expenses:

Change in estimated doubtful debts (5,000) 6,000

Translation adjustments comprising:

Net loss/(gain) on foreign currency bank balances (17,174) 651

Net loss/(gain) on cash and cash equivalents - (9)

Payments to auditor

Audit fees 64,390 61,811

Consulting advice - 5,000

64,390 66,811

NOTES TO THE FINANCIAL STATEMENTS ‹


CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATES

In the application of NZ IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may di�er from these estimates.

The fair value of �nancial instruments that are not traded in an active market (for example, over the counter derivatives) is determined by using valuation techniques. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at each balance sheet date. The carrying value of the derivative �nancial instruments are disclosed in note 18.

The estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision a�ects only that period, or in the period of the revision and future periods if the revision a�ects both current and future periods.

Management have made judgments that relate to the estimated useful life of plant, property and equipment, its fair value, and the value of receivables. The judgements are disclosed in Statement of Accounting Policies (r), and Notes to the Financial Statements, note 9 and note 10 carrying amount, revaluations and other disclosures.

If the estimated useful life of depreciable assets was 5% longer/shorter the operating pro�t for the year would have increased/decreased for the following classes by:

Buildings 42,892 Port installations 101,837 Plant, equipment and �ttings 82,784 Bulk tanks 417 Floating plant 36,189 Maintenance dredging 52,023 Capital dredging 21,505

CHANGES IN ACCOUNTING ESTIMATES

2013: There have been no changes to accounting estimates in the current year.

2012: From the start of the 2012 year, Port Taranaki Limited changed the estimated useful life from date of purchase of Tug Kupe from 25 years to 7 years.

The current �nancial e�ect of this change increases depreciation by $98,804 in 2012 and subsequent years. This change has been made in 2012 as it better re�ects management's view of the useful life of Tug Kupe. This change will apply to the 2012 �nancial year and subsequent years. Note that this change in estimate still remains within the range of depreciation periods for Floating Plant from 3 to 25 years under the depreciation accounting policy (r).

ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

In the current year the Company has adopted all of the Standards and Interpretations issued by the External Reporting Board (the XRB) that are relevant to its operations and e�ective for the current reporting period.

At the date of authorisation of the �nancial report, the following Standards and Interpretations were on issue but not yet e�ective:

E�ective for annual Expected to be reporting periods initially applied in the beginning on or after �nancial year ending

"New" Accounting Standards Framework - For-pro�t Entities XRB A1 Accounting Standards Framework 1 December 2012 30 June 2014

- NZ IAS 19 - Employee Bene�ts - Amendments 1 January 2013 30 June 2014

- NZ IAS 27 - Separate Financial Statements (revised 2011) 1 January 2013 30 June 2014

- NZ IAS 28 - Investments in Associates and Joint Ventures (revised 2011) 1 January 2013 30 June 2014

- NZ IAS 32 - Financial Instruments Presentation - O�setting Financial Assets and Financial Liabilities 1 January 2014 30 June 2015

- NZ IAS 36 - Impairment of Assets - Recoverable Amount Disclosures 1 January 2014 30 June 2015

- NZ IAS 39 - Financial Instruments: Recognition and Measurement - Novation of Derivatives 1 January 2014 30 June 2015

- NZ IFRIC 21 - Levies 1 January 2013 30 June 2014

- Improvements to IFRS: 2009-2011 Cycle 1 January 2013 30 June 2014

- NZ IFRS 7 - Financial Instruments: Disclosures - O�setting Financial Assets and Financial Liabilities - Amendments 1 January 2013 30 June 2014

- NZ IFRS 9 - Financial Instruments 1 January 2015 30 June 2016

- NZ IFRS 10 - Consolidated Financial Statements 1 January 2013 30 June 2014

- NZ IFRS 11 - Joint Arrangements 1 January 2013 30 June 2014

- NZ IFRS 12 - Disclosure of Interests in Other Entities 1 January 2013 30 June 2014

- NZ IFRS 13 - Fair Value Measurement 1 January 2013 30 June 2014

Application of the Standards, Amendments and Interpretations is not expected to have a material impact on the �nancial statement account balances of the Company but may require additional �nancial statement disclosures. All other Standards, Amendments and Interpretations are not applicable or expected to have a material e�ect.

CHANGES IN ACCOUNTING POLICIES

Accounting policies have been applied consistently with those in the previous year except for the change to hedge accounting discussed in (c) (i) and imputation credits. The imputation credits have been recorded on an accruals basis rather than a cash basis for the 2013 year and this has also been re�ected in the 2012 comparative, which is in line with FRS 44.

NOTES TO THE FINANCIAL STATEMENTS ‹STATEMENT OF ACCOUNTING POLICIES



Payments to directors Included with Included with Included with Included with General Employee General Employee Expenses Bene�ts Expenses Bene�ts 2013 2013 2012 2012

J S Auld - 60,000 - 52,000

P D Horton - 32,000 - 26,000

T W Johnston - - - 8,880

R Krogh - 32,000 - 650

D N MacLeod - 32,000 - 26,000

M C Norgate - 37,500 - 31,085

R N Taylor - 32,000 32,895 26,000

- 225,500 32,895 170,615

2013 2012 NZ$ NZ$

3 INCOME TAX EXPENSE/(CREDIT)

(a) Income tax recognised in the Pro�t and Loss

Current tax expense 3,577,142 2,852,749

Deferred tax on temporary di�erences (332,689) (844,439)

Income tax expense/(credit) per Pro�t and Loss 3,244,453 2,008,310

Income tax is calculated at an average e�ective tax rate of 28 percent of the estimated assessable pro�t for the year.

(b) Reconciliation of Accounting Pro�t before Tax and Income Tax Expense/(Credit)

Pro�t before taxation 10,707,291 6,372,318

Income tax expense calculated at 28% 2,998,041 1,784,249

Tax e�ect of non deductible expenses in pro�t before tax 9,887 41,031

Tax e�ect of zero rated building additions current year 54,882 294,332

Tax e�ect of rate change on future tax bene�ts - (6,007)

Prior period adjustments impacting income expense under/(over) 181,643 (105,295)

Income Tax Expense per Statement of Comprehensive Income 3,244,453 2,008,310

4 TAXATION REFUNDABLE/(PAYABLE)

Opening balance (1,446,266) (755,141)

Prior year tax paid/(refund) 1,539,715 761,576

Prior period adjustment (93,450) (6,436)

Current taxation payable (3,479,019) (2,846,312)

Provisional taxation paid 2,466,666 1,400,047

Taxation refundable/(payable) (1,012,354) (1,446,266)


NOTES TO THE FINANCIAL STATEMENTS ‹NOTES TO THE FINANCIAL STATEMENTS


5 DEFERRED TAX ASSET/(LIABILITY) Depreciation/ Provisions/ Receivables/ Total Amortisation Payables Prepayments NZ$ NZ$ NZ$ NZ$

As at 1 July 2011 (3,074,485) 1,072,285 (56,840) (2,059,040)

(Charged)/credited to Pro�t or Loss in the Statement of Comprehensive Income 934,194 (85,275) (4,480) 844,439

As at 30 June 2012 (2,140,291) 987,010 (61,320) (1,214,601)

(Charged)/credited to Pro�t or Loss in the Statement of Comprehensive Income 364,678 143,394 (175,382) 332,689

As at 30 June 2013 (1,775,613) 1,130,404 (236,702) (881,912)

There are no income tax losses carried forward.

2013 2012 NZ$ NZ$

6 CASH AND CASH EQUIVALENTS

Cash at bank and on hand 530,852 461,532

The carrying amount for cash and cash equivalents equals fair value.

7 TRADE AND OTHER RECEIVABLES

(a) Current

Trade receivables 4,275,842 7,228,546

Provision for impairment (9,000) (14,000)

Net trade receivables 4,266,842 7,214,546

Other receivables 275,436 (611,702)

Related party receivables (note 23) - 2,612

4,542,278 6,605,456

The fair value of trade and other receivables approximates their carrying value.

2012: The Other Receivables �gure of ($611,702) as at 30 June 2012 includes an accrued credit of $1,360,330 (net of GST)

being the di�erence between the scheduled rate invoiced to NKTT Users from the 1st January 2012 to 30 June 2012

($5.30 per cubic metre) and the anticipated rate ($4.12 per cubic metre) once agreement is reached with this group of

customers.

2013: The contract rate was settled and all parties had signed the agreement by April 2013.

The average credit period on sales of services is 29 days (2012: 58 days). The 2012 �gure of 58 days is based upon

debtors outstanding in the trade receivables ledger but excludes the anticipated credit of $1,360,330 referred to above.

The Company reserves the right entirely at its discretion to apply an interest charge at 2.5% per month compounding

on overdue accounts, as per ‘Standard conditions of business’ 5.5(c) issued by Port Taranaki Limited. If credit has been

granted, then payment for services rendered is due by the 20th of the month following invoice. The Company has

provided in full for any receivables over 90 days old which are considered potentially unrecoverable. All other debtors

are provided for based on estimated irrecoverable amounts determined by reference to past default experience.





2013 2012 NZ$ NZ$

Maintenance dredging

As at 30 June previous year

Cost 2,186,096 2,186,096

Accumulated depreciation (1,405,354) (384,855)

Net book value previous year 780,742 1,801,241

Carrying amount at 1 July 780,742 1,801,241

Additions 2,148,107 -

Depreciation (1,040,454) (1,020,499)

Carrying amount at 30 June 1,888,395 780,742

Port installations


Cost 41,417,214 41,341,205

Accumulated depreciation (23,664,220) (21,310,304)

Net book value previous year 17,752,994 20,030,901

Carrying amount at 1 July 17,752,994 20,030,901

Additions 187,412 139,214

Disposals - (61,730)

Depreciation (2,036,734) (2,355,391)

Carrying amount at 30 June 15,903,672 17,752,994

Bulk tanks

Carrying amount at 1 July - -

Additions 999,999 -

Depreciation (8,334) -

Carrying amount at 30 June 991,665 -

Plant, equipment and �ttings


Cost 26,377,828 27,610,111




Additions 2,437,165 723,652

Disposals (49,698) (478,353)

Depreciation (1,655,677) (1,715,481)





Included in the Company’s trade receivable balance are debtors with a carrying amount of $0.349M (2012: $1.641M)

which are past due at the reporting date. Of the 2012 �gure of $1.641M an amount of $1,346,733 ( GST inclusive)

related to the di�erence in the amounts invoiced to NKTT Users and the anticipated amount receivable. The balance of

the $1.641M being $294,556 was not provided for as there had not been a signi�cant change in credit quality and the

Company believed that the amounts were still considered recoverable. The Company did not hold any collateral over

these balances. The average age of the $349,232 receivables is 31 days (2012: 33 days).

2013 2012 NZ$ NZ$

Movement in the provision for impairment

Balance 1 July 14,000 8,000

Increase/(Decrease) in impairment provision recognised in pro�t or loss (5,000) 6,000

Balance 30 June 9,000 14,000

In determining the recoverability of a trade receivable the Company considers any change in the credit quality of the

trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk lies in

trade debtors where 37.88%, or 25 (2012: 32.95%, 29) by number of trade debtors, represent 85.59% (2012: 90.49%) of

the total amount of trade debtors. 8.17% (2012: 22.70%) of trade receivables were overdue but not impaired at balance

sheet date. 0.21% (2012: 0.19%) of trade receivables were considered impaired. All �gures referred to in this paragraph

are inclusive of the amounts invoiced to the NKTT User Group. No collateral, security or other credit enhancements are

held by the Company. The directors believe that there is no further credit provision required in excess of the provision

for impairment.

8 INVENTORIES

Maintenance consumables 470,003 462,849

9 PROPERTY, PLANT AND EQUIPMENT

Land


Additions 14,719,761 121,600

Revaluations 12,364,969 -


Buildings


Cost 24,775,826 24,011,801




Additions 126,215 1,203,252

Disposals - (118,245)

Depreciation (857,848) (823,380)






Revaluations

Land assets have been valued on their highest and best use taking into account the existing zoning, potential for

utilisation and localised port market. All land holdings are used or held for port operational requirements and as such

are valued under the requirements of NZ IAS 16 using fair value (market value).

Land was revalued at 30 June 2013 by Mr Ian Baker, a registered valuer with Telfer Young (Taranaki) Ltd, New Plymouth.

Telfer Young have been contracted by Port Taranaki as independent valuers. The revalued amount of land used in this

report amounts to $74.1M using the Direct Sales Comparison Approach methodology.

The carrying amount of land had it been recognised under the cost model is as follows:

2013 2012 NZ$ NZ$

25,206,198 10,486,437

Other disclosures

(i) There are no items of property, plant or equipment which are not in current use.

(ii) There have been no impairment losses recognised or reversed in the current period.

(iii) $48,000 (2012: Nil) of borrowing costs were capitalised.

(iv) There are no restrictions in titles relating to property, plant and equipment or items pledged as security for liabilities

apart from those held by Westpac Banking Corporation (note 13).

(v) On 12 June 2013 the Company purchased 18.805 hectares of adjoining land from Contact Energy Limited. As part of

the sale and purchase agreement Contact Energy Limited:

1. Has a right to reacquire 6.66 hectares of speci�ed land at a �xed price for the purposes of electricity generation

and/or gas related import/export facilities for a period of up to 25 years from the settlement date; and

2. Has a right of �rst refusal. The Company cannot sell any of the 18.805 hectares of land without �rst providing

Contact Energy Limited the option to reacquire the property under the price terms and conditions the Company

desires to sell.

10 OTHER INTANGIBLE ASSETS – COMPUTER SOFTWARE


Cost 4,463,547 4,267,323

Accumulated amortisation (3,237,342) (2,667,973)



Additions 101,511 196,224

Amortisation (486,612) (569,369)

Carrying amount at 30 June 841,104 1,226,205

As at 30 June 2013 Cost Accumulated Carrying depreciation amount

Computer software 4,565,058 (3,723,954) 841,104




2013 2012 NZ$ NZ$

Floating plant


Cost 14,413,274 14,335,340




Additions 37,617 77,936

Depreciation (723,783) (718,772)


Capital dredging


Cost 21,505,192 21,505,192




Depreciation (430,104) (430,104)


Capital works in progress

Carrying amount at 1 July 504,970 24,674

Additions 20,929,682 2,745,950

Transferred upon completion (19,656,277) (2,265,654)

Carrying amount at 30 June 1,778,375 504,970

Total plant, property and equipment 146,503,121 119,011,103

As at 30 June 2013 Cost Accumulated Carrying depreciation amount

Land (including revaluations) 74,183,000 - 74,183,000

Buildings 24,902,041 (11,637,334) 13,264,707

Maintenance dredging 2,305,823 (417,428) 1,888,395

Port installations 41,604,625 (25,700,953) 15,903,672

Bulk tanks 999,999 (8,334) 991,665

Plant, equipment and �ttings 26,485,715 (15,062,470) 11,423,245

Floating plant 14,450,891 (6,234,248) 8,216,643

Capital dredging 21,505,192 (2,651,773) 18,853,419

Capital works in progress 1,778,375 - 1,778,375

Total plant, property and equipment 208,215,661 (61,712,540) 146,503,121





2013 2012 NZ$ NZ$

13 BORROWINGS

(a) Current liabilities

Secured loans - Westpac 44,438 215,839

Weighted average interest rate 0.00% 0.00%

(b) Non current liabilities

Secured loans - Westpac 36,700,000 27,100,000

Less deferred loan facility fee (31,250) (56,250)

Secured loans - Westpac 36,668,750 27,043,750

Weighted average interest rate 3.45% 5.03%

Other disclosures

(i) The non current loans are due within 2 years.

(ii) The carrying amount for current and non current loans and their fair values are disclosed in note 18.

(iii) The carrying amount for current and non current loans is denominated in New Zealand dollars.

(iv) The secured loans are obtained under a $50 million (2012: $50 million) funding facility provided by Westpac Banking

Corporation. As at 30 June $13.3 million (2012: $22.9 million) was undrawn. The borrowings in the statement of �nancial

position include accrued interest.

(v) During the year there had not been any defaults or breaches of bank covenants.

(vi) The sole security interest, �xed charge and agreement to mortgage is to Westpac Banking Corporation for a priority

amount of $80 million (2012: $80 million). The security interest is in Port Taranaki's Personal Property (present and

after acquired) and the �xed charge and agreement to mortgage is granted over Other Property (present and future

rights). Other Property is de�ned as any other land or assets not deemed Personal Property. Personal Property can be

considered to be any property other than land.

(vii) The weighted average interest rate is based on the applicable �xed rates and �oating rates as at balance date. The

weighted average interest rate for the current liability in 2013 is 0.00% (2012: 0.00%) as this is solely interest payable

and only includes interest payable.

14 ISSUED CAPITAL

Balance 1 July 26,000,000 26,000,000

Balance 30 June 26,000,000 26,000,000

The total number of shares authorised, issued and fully paid at 30 June 2013 was 52,000,000 (30 June 2012 was

52,000,000). The shares have no par value.

All shares rank equally in terms of voting rights, rights to �xed dividends and rights to share in any surplus on wind up of

the Company.

There is no right of redemption attached to these shares.




2013 2012 NZ$ NZ$

11 TRADE AND OTHER PAYABLES


Related parties payables and accruals 750 11,622

Employee bene�ts 564,595 552,350

Interest payable - weighted average cost 5.98% 360 120

Trade payables and accruals 2,802,274 2,982,520

3,367,979 3,546,612

Terms of credit are payment on the 20th of the month following invoices unless other terms are speci�ed by suppliers.

The Company has �nancial risk management systems in place to ensure that all payables are paid within the credit

timeframe.


Trade payables and accruals 663,000 824,000

4,030,979 4,370,612

12 PROVISIONS - EMPLOYEE BENEFITS


Sick leave 51,000 41,000

Retiring allowance 189,000 197,000

Annual leave 1,214,827 1,155,739

Long service leave 123,617 135,579

Closing balance 1,578,444 1,529,318


Retiring allowance 763,000 720,000

Long service leave 209,000 234,000

Closing balance 972,000 954,000

2,550,444 2,483,318

The provision is a�ected by a number of estimates including the expected employment period of employees and the

timing of employees utilising the bene�ts. Bene�ts are recalculated annually, retiring allowance and long service leave

by an actuary, and all non current portions are discounted using the appropriate government bond rate matched to the

year the provision is due as applicable at balance sheet date. All movements are recorded in operating expenses.






2013 2012 NZ$ NZ$

15 ASSET REVALUATION RESERVE

The asset revaluation reserve arises on the revaluation of land. Where revalued land is sold, that portion of the asset

revaluation reserve which relates to that asset and is e�ectively realised, is transferred directly to retained earnings.

Balance 1 July 36,611,833 36,611,833

Revaluation increments/decrements 12,364,969 -

Balance 30 June 48,976,802 36,611,833

16 RETAINED EARNINGS

Balance 1 July 28,435,748 26,271,740

Pro�t for the period 7,462,838 4,364,008

Dividends (note 17) (2,950,000) (2,200,000)

Balance 30 June 32,948,586 28,435,748

17 DIVIDENDS PAID

Paid September 1,450,000 950,000

Paid March (2012: May) 1,500,000 1,250,000

2,950,000 2,200,000

All dividends were paid in cash and fully imputed.

18 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

(a) Capital risk management

The Company manages its capital to ensure it is able to continue as a going concern while maximising the return to

stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Company consists of debt, which includes the borrowings disclosed in note 13, and equity

attributable to the shareholder, comprising issued capital, reserves and retained earnings as disclosed in notes 14, 15

and 16.

The Company's board of directors monitors and reviews the capital structure annually through the statement

of corporate intent process and treasury policy review. Part of this review includes adherence to bank covenant

requirements which have capital requirements in relation to debt to equity ratio. Through these two processes the

Company seeks to balance the growth objectives of the Company with the Company's dividend policy objective.

Due to the strength of the Company's balance sheet all new business ventures of the Company can currently be

debt funded.



(b) Categories and fair value of �nancial instruments

The estimated fair values of �nancial instruments are as follows:

2013 Carrying 2013 Fair 2012 Carrying 2012 Fair Amount Value Amount Value NZ$ NZ$ NZ$ NZ$

Financial Assets

Loans and receivables

Foreign currency bank balances 216,406 216,406 9,538 9,538

Cash and cash equivalents 314,445 314,445 451,995 451,995

Receivables 4,542,278 4,542,278 6,605,456 6,605,456

Derivative �nancial instruments 634,366 634,366 - -

Financial Liabilities

At amortised cost

Payables and accruals current 3,367,979 3,367,979 3,546,612 3,546,612

Payables and accruals non current 663,000 663,000 824,000 824,000

Provisions current 1,578,444 1,578,444 1,529,318 1,529,318

Provisions non current 972,000 972,000 954,000 954,000

Interest bearing loans - Westpac 36,713,188 36,674,253 27,259,589 27,392,753

The following methods and assumptions were used to estimate the fair value of each class of �nancial instrument:

Derivative �nancial instruments – Cash �ow hedge

Interest rate swap

The nature of the risk is the variability of the hedged item resulting from the changes on BKBM interest rates associated

with on-going term borrowings.

Fair value is stated at the indicative market value obtained from the calculation agent.

E�ective commencement date 24 June 2013

Rate 3.86%

Term 84 months

Expiry date 24 June 2020

Notional value 30,000,000

Cash and cash equivalents, foreign currency balances, receivables and short term payables long term liabilities and

accruals:

The carrying value of these items is equivalent to the fair value.

Interest bearing loans

The fair value of the current loans and term loans are estimated based upon the market prices available for similar debt

securities obtained from the lender at balance sheet date.

(c) Financial risk management objectives

The �nance department of the Company provides treasury services to the Company, monitoring and reviewing �nancial

risk through internal management reporting. These risks include market risk (including currency risk and fair value

interest rate risk), credit risk, liquidity risk and cash �ow interest rate risk.





Liquidity and interest risk tables - Financial liabilitiesThe following tables detail the Company's remaining contractual maturity for its non-derivative �nancial liabilities. As the amounts included in the table are contractual undiscounted cash �ows these amounts will not reconcile to the amounts disclosed in the balance sheet.

2013Interest risk table �nancial liabilities

Weighted average e�ective Less than 1-3 3 months 1-5 5+ Total interest rate 1 month months to 1 year years years % NZ$ NZ$ NZ$ NZ$ NZ$ NZ$

Trade and other payables 0.00 3,052,979 315,000 - 530,000 133,000 4,030,979

Provisions 0.00 76,565 153,130 1,348,749 214,000 758,000 2,550,444

Fixed interest rate instruments 3.480 - 48,768 5,840,378 - - 5,889,145

Variable interest rate instruments 3.453 1,200,360 278,757 776,894 30,221,362 - 32,477,372

Derivative Financial instruments

In�ows/Out�ows 2.690 - 88,471 262,529 1,404,000 702,000 2,457,000

4,329,904 884,125 8,228,550 32,369,362 1,593,000 47,404,940

2012Interest risk table �nancial liabilities


Trade and other payables 0.00 3,205,599 341,013 - 550,000 274,000 4,370,612

Provisions 0.00 73,849 147,698 1,307,771 154,000 800,000 2,483,318

Fixed interest rate instruments 5.023 177,948 3,050,290 18,493,707 5,715,128 - 27,437,073

Variable interest rate instruments 5.032 600,120 - - - - 600,120

4,057,516 3,539,001 19,801,478 6,419,128 1,074,000 34,891,123

Interest risk tables - �nancial assets The following table details the Company's expected maturity for its non-derivative �nancial assets. The tables below have been drawn up based on the undiscounted contractual assets including interest that will be earnt on those assets except where the Company anticipates that the cash �ow will occur in a di�erent period. As the amounts included in the table are contractual undiscounted cash �ows these amounts will not reconcile to the amounts disclosed in the balance sheet.

2013Interest risk table �nancial assets


Cash and cash equivalents variable 530,852 - - - - 530,852

Trade and other receivables 0.00 4,542,278 - - - - 4,542,278

5,073,130 - - - - 5,073,130

2012 Interest risk table �nancial assets


Cash and cash equivalents variable 461,532 - - - - 461,532

Trade and other receivables 0.00 6,605,456 - - - - 6,605,456

7,066,988 - - - - 7,066,988




The Company seeks to minimise the e�ects of these risks by adhering to a treasury policy reviewed by the Company's

board of directors. The treasury policy provides written guidelines on foreign exchange risk, interest rate risk and credit

risk. Surplus funds are either applied against Company borrowings minimising surplus liquidity or invested short term

until required.

The Company does not enter into, or trade �nancial instruments, including derivative �nancial instruments for

speculative purposes.

(d) Market risk

The Company's activities expose it to interest rate movement risk principally, and occasionally to foreign exchange

risk when capital assets are purchased in foreign currency. These risks are minimised by adherence to the Company's

treasury risk policy which endeavours to minimise risk by:

i) Ensuring a minimum of 50% of the Company's interest bearing debt is �xed term or �xed by way of �nancial

derivative. At balance date the �nancial derivative exposure was limited to an interest swap listed in (b) above.

ii) Ensuring that any capital asset purchase of $250,000 or greater sourced in foreign currency is fully hedged within two

days of unconditional purchase. At balance date the foreign currency exposure was limited to foreign currency bank

balances listed in (b) above.

As at 30 June 2013, if interest rates at that date had been 100 basis points lower with all other variables held constant,

post-tax pro�t for the year would have been $159,000 (2012: $3,000) higher, arising as a result of lower interest expense

on average variable rate borrowings. If interest rates had been 100 basis points higher, with all other variables held

constant post-tax pro�t would have been $159,000 (2012: $3,000) lower, arising as a result of higher interest expense on

variable rate borrowings. Pro�t is equally sensitive to interest rate decreases as increases. The sensitivity is higher in 2013

than in 2012 due to higher variable rate borrowings.

(e) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in �nancial loss to the

Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining su�cient

collateral, where appropriate, as a means of mitigating the risk of �nancial loss from defaults. The Company’s exposure

and the credit worthiness of its counterparties are continuously monitored and the aggregate value of transactions

concluded is spread amongst approved counterparties.

In the normal course of its business the Company incurs credit risk from trade debtors and �nancial institutions. The

extent of concentration of credit risk lies in trade debtors. Refer to note 7.

Except, as currently provided for, the Company does not expect the non performance in respect of any outstanding

obligations at balance date.

The carrying amount of �nancial assets recorded in the �nancial statements, net of any allowances for losses,

represents the Company’s maximum exposure to credit risk without taking account of any collateral obtained.

No security is held on any of the above amounts.

(f ) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate

liquidity risk management framework for the management of the Company’s short, medium and long-term funding and

liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking

facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash �ows and by monitoring

working capital turnover. Included in note 13(iv) is a list of additional undrawn facilities that the Company has at its

disposal to further reduce liquidity risk.





2013 2012 NZ$ NZ$

(b) Non-Cancellable Operating Leases as Lessor

Future minimum lease payments under non-cancellable leases are as follows:

Within 1 year 2,133,991 2,412,909

Between 1-5 years 3,841,635 4,092,663

Greater than 5 years 6,307,895 7,248,368

Total 12,283,521 13,753,941

Port Taranaki Limited leases a range of land and buildings to a number of customers. The majority of leases include

rights of renewal for periods of up to seven years, with several land leases containing rights of renewal from 20 up to 50

years. There were no contingent rents recognised as income in the 2012 and 2013 years.

21 IMPUTATION CREDIT ACCOUNT

The imputation credits available for use in subsequent reporting periods are:

15,423,232 13,110,376

22 RELATED PARTY TRANSACTIONS

The Company has a related party relationship with its parent, directors and executive o�cers.

a) Transactions with parent

Port Taranaki Limited was a 100% owned subsidiary of the Taranaki Regional Council (TRC) at all times during the year.

Apart from dividends (see note 17) the following transactions occurred between Port Taranaki Limited and TRC during

the year.

i) Sale of goods and services to parent 40,166 39,417

ii) Purchase of goods and services from parent 42,574 51,112

iii) Current payables to parent at balance date 750 11,622

iv) Current receivables from parent at balance date - 2,612

v) There are no guarantees or bad debts

vi) There was no taxation grouping arrangement in 2012 or 2013.

b) Transactions with subsidiaries

2013: Port Taranaki Limited had no subsidiaries.

2012: Port Taranaki Limited had no subsidiaries.

c) Transactions with key management personnel

i) The compensation of the directors and executives, being the key management personnel of the Company is set out

below:

Short term employee bene�ts 2,521,602 2,204,254

Other long term bene�ts (19,000) 4,000

Termination bene�ts 217,179 -

Post employment bene�ts (7,000) 22,000

2,712,781 2,230,254

ii) A fee of $0 (2012: $32,895) was paid to Mr R N Taylor a director of Port Taranaki Limited during the year for economic

consulting services.





2013 2012 NZ$ NZ$

19 RECONCILIATION OF PROFIT FOR THE PERIOD TO NET CASH FLOWS FROM OPERATING ACTIVITIES

Pro�t after taxation 7,462,838 4,364,008

Plus/(less) non-cash items:

Depreciation and amortisation 7,239,547 7,632,996

Interest/Derivatives receivable accrued to advance account - -

Decrease/(Increase) in deferred tax balances (332,689) (844,439)

Net loss/(Pro�t) on disposal of property, plant and equipment 16,592 312,930

6,923,450 7,101,487

Changes in net assets and liabilities

(Increase)/Decrease in assets:

Trade and other receivables 2,063,178 (2,136,986)

Prepayments (172,086) 19,498

Derivative �nancial instruments (634,366) -

Inventories (7,153) 8,428

Increase/(Decrease) in liabilities:

Provisions 67,126 269,561

Trade and other payables 294,733 621,746

Interest payable (171,401) (273,785)

Taxation payable (433,912) 691,125

1,006,118 (800,413)

Plus/(Less) items classi�ed as investment activities:

Movement in �xed asset creditors (48,370) 10,456

(48,370) 10,456

Net cash provided by operating activities 15,344,037 10,675,538

20 OPERATING LEASES

(a) Non Cancellable Operating Leases as Lessee

Lease commitments due as follows:

Within 1 year 35,480 53,238

Between 1-5 years 17,440 52,320

Total 52,920 105,558

Lease payments under operating leases recognised as an expense during

the year. 250,972 245,740

Operating lease payments represent rentals payable by Port Taranaki Limited for the lease of land and buildings. All

operating lease contracts contain market review clauses in the event that Port Taranaki Limited exercises its option

to renew. Port Taranaki Limited does not have an option to purchase any of the leased assets at the end of the lease

periods.




2013 2012 NZ$ NZ$

23 COMMITMENTS

Estimated capital expenditure contracted for at balance date but not

provided, $2,401,966 (2012: $486,000) for a new launch and roading work

(2012 a stormwater drainage project). 2,401,966 486,000

24 EVENTS SUBSEQUENT TO BALANCE DATE

2013: There are no events subsequent to balance date.

2012 : On 31 December 2011 a wharfage services agreement (WSA) between Port Taranaki Ltd (PTL) and seven

customers (together known as the NKTT User Group) expired. PTL has been negotiating with the group of seven

customers and a new member since November 2010 to agree a successor WSA. Despite PTL and the NKTT User Group

reaching broad agreement on the key economic principles, including the wharfage rates to apply, of a successor WSA

no new agreement has yet been �nalised and executed. Whilst no successor WSA has been �nalised or executed the

NKTT User Group have short paid the agreed wharfage rate by an amount of 24.22 cents per cubic metre or a total of

$232,507 GST exclusive during the six months to 30 June 2012 and furthermore the payments made by the NKTT Users

are on a without prejudice basis. PTL considers that at the date of this report that negotiations are su�ciently advanced

to conclude that there is low or negligible risk of the short paid amount being unrecovered.

25 CONTINGENT LIABILITIES

2013 and 2012: The Company is a participating employer in the NPF DBP Contributors scheme ("the Scheme") which

is a multi-employer de�ned bene�t scheme. If the other participating employers ceased to participate in the Scheme,

the employer could be responsible for the entire de�cit of the Scheme (see note 26). Similarly, if a number of employers

ceased to participate in the Scheme, the Company could be responsible for an increased share of the de�cit.

26 DEFINED BENEFIT PLAN

As at 30 June 2013 the multi-employer de�ned bene�t plan with National Provident Fund (NPF) entitles 1 employee

(2012: 1 employee at balance date) to retirement bene�ts. No other post retirement plans are provided by the Company.

The total expenses recognised in the pro�t or loss of $0 (2012: $0) represents contributions paid to the plan. The

Company has no other known liability in respect to the scheme.

The Schemes Actuary has advised that insu�cient information is available to use de�ned bene�t accounting as it is not

possible to determine, from the terms of the Scheme, the extent to which the de�cit will a�ect future contributions by

employers, as there is no prescribed basis for allocation.

As at 31 March 2012, the Scheme had a past service surplus of $19.833 million (2011: $37.6 million), 8.3% (2011: 16.4%)

of the liabilities. This amount is exclusive of Employer Superannuation Contribution Withholding Tax. This surplus

was calculated using a discount rate equal to the expected return on the assets, but otherwise the assumptions and

methodology were consistent with the requirements of NZ IAS 19.

The Actuary to the Scheme recommended previously that the employer contributions were suspended with e�ect from

1 April 2011. In the latest report the Actuary recommended employer contributions remain suspended.

27 OTHER ANNUAL REPORT DISCLOSURES

The shareholder has resolved not to require disclosure of the matters listed in section 211 (1), (e) and (g) of the

Companies Act 1993.

28 STATUTORY COMPLIANCE

2012 and 2013: During the year the Company breached section 322 of the Resource Management Act 1991. Board

approved capital expenditure was in progress at balance sheet date to provide corrective action.

2012: The Company breached sections 6 (a) and 16 (1) of the Port Companies Act 1988. Corrective action was taken for

both issues and at balance sheet date the Company was in compliance with all statutes.


INDEPENDENT AUDITOR'S REPORT ‹NOTES TO THE FINANCIAL STATEMENTS


TO THE READERS OF PORT TARANAKI LIMITED’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

INDEPENDENT AUDITOR'S REPORT ‹

The Auditor-General is the auditor of Port Taranaki Limited (the company). The Auditor-General has appointed me, Bruno Dente, using the sta� and resources of Deloitte, to carry out the audit of the �nancial statements of the company on her behalf.

We have audited the �nancial statements of the company on pages 14 to 38, that comprise the statement of �nancial position as at 30 June 2013, the statement of pro�t and loss and other comprehensive income, statement of changes in equity and statement of cash �ows for the year ended on that date and the notes to the �nancial statements that include accounting policies and other explanatory information.

Opinion Financial statements

In our opinion the �nancial statements of the company on pages 14 to 38:

- comply with generally accepted accounting practice in New Zealand;

- comply with International Financial Reporting Standards; and

- give a true and fair view of the company's:

- �nancial position as at 30 June 2013; and

- �nancial performance and cash �ows for the year ended on that date.

Other legal requirements

In accordance with the Financial Reporting Act 1993 we report that, in our opinion, proper accounting records have been kept by the company as far as appears from an examination of those records.

Our audit was completed on 15 August 2013. This 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 our responsibilities, and explain our independence.

Basis of Opinion

We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the �nancial statements are free from material misstatement.

Material misstatements are di�erences or omissions of amounts and disclosures that, in our judgement, are likely to in�uence readers' overall understanding of the �nancial statements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.

An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the �nancial statements. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the �nancial statements whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation of the company's �nancial statements that give a true and fair view of the matters to which they relate. We consider internal control in order to design audit procedures that are appropriate in the circumstances but not for the purpose

of expressing an opinion on the e�ectiveness of the company’s internal control.

An audit also involves evaluating:

- the appropriateness of accounting policies used and whether they have been consistently applied;

- the reasonableness of the signi�cant accounting estimates and judgements made by the Board of Directors;

- the adequacy of all disclosures in the �nancial statements; and

- the overall presentation of the �nancial statements.

We did not examine every transaction, nor do we guarantee complete accuracy of the �nancial statements. Also we did not evaluate the security and controls over the electronic publication of the audited information.

In accordance with the Financial Reporting Act 1993, we report that we have obtained all the information and explanations we have required. We believe we have obtained su�cient and appropriate audit evidence to provide a basis for our audit opinion.

Responsibilities of the Board of Directors

The Board of Directors is responsible for preparing �nancial statements that:

- comply with generally accepted accounting practice in New Zealand; and

- give a true and fair view of the company’s �nancial position, �nancial performance and cash �ows.

The Board of Directors is also responsible for such internal control as it determines is necessary to enable the preparation of �nancial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is also responsible for the publication of the �nancial statements, whether in printed or electronic form.

The Board of Directors’ responsibilities arise from the Financial Reporting Act 1993 and the Port Companies Act 1988.

Responsibilities of the Auditor

We are responsible for expressing an independent opinion on the �nancial statements and reporting that opinion to you based on our audit. Our 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 External Reporting Board.

Other than the audit, we have no relationship with or interests in the company.

Bruno Dente DELOITTEOn behalf of the Auditor-General Hamilton, New Zealand

REPORT 2013PORT TARANAKI LIMITED 40 REPORT 2013PORT TARANAKI LIMITED 40 PORT TARANAKI LIMITED

REPORT 201341

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Operations

Trade(millionsoffreighttonnes)

Imports 0.75 0.78 0.79 0.66 0.76 0.85 0.77 0.61 0.77 0.59

Exports 3.82 3.06 3.10 2.93 2.76 2.53 2.51 2.04 2.68 2.89

Total 4.57 3.84 3.89 3.59 3.52 3.38 3.28 2.65 3.45 3.48

Vesselarrivals(over100GRT) 679 664 783 717 695 927 897 677 562 612

Totalgrosstonnage(GT)(millions) 6.55 5.84 6.94 6.78 6.39 7.20 7.06 6.29 6.32 6.98

Permanent full time employees 121 122 121 127 129 122 116 113 110 109

Financial ($millions)

Revenue 44.97 41.30 39.28 37.83 46.81 42.79 36.95 29.93 27.96 28.08

Total interest expense 1.46 2.32 2.93 3.08 2.72 3.31 1.55 1.57 1.48 1.39

Earningsbeforeinterest,subvention 12.16 8.67 7.63 6.71 10.87 11.28 8.96 3.65 3.68 5.12

paymentsandtaxation(EBIT)

Taxation 3.24 2.01 1.64 4.91 2.74 3.25 2.67 1.42 0.70 1.14

Netprofitaftertaxation 7.46 4.36 3.12 (1.27) 5.42 4.76 4.78 2.23 1.45 2.52

Dividends 2.95 2.20 1.85 1.90 3.90 1.80 1.00 0.84 2.20 2.60

Capitalexpenditureandacquisitions 21.03 2.94 3.78 4.34 16.21 5.90 20.34 11.34 5.68 4.10

Equity 108.56 91.05 88.88 87.61 90.78 89.26 71.56 67.79 67.28 53.23

Interestbearingdebt 36.71 27.26 35.93 39.62 40.56 35.30 37.30 26.00 21.30 21.60

Total tangible assets 152.27 126.60 132.00 134.25 137.66 131.16 114.66 99.08 92.68 77.73

Earningspershare(¢) 14.35 8.39 6.01 (2.43) 10.42 9.16 9.19 4.29 2.79 4.84

Ordinarydividendspershare(¢) 5.67 4.23 3.56 3.65 7.50 3.46 1.92 1.62 4.23 5.00

Netassetspershare(¢) 209 175 171 168 175 172 138 130 129 102

Equity(%) 70.61 71.23 66.53 64.35 65.39 67.97 62.30 68.23 72.59 68.49

Returnonequity(%) 6.87 4.79 3.51 (1.45) 5.97 6.34 6.67 3.29 2.15 4.73

Returnonassets(%) 4.90 3.44 2.36 (0.95) 3.94 3.63 4.16 2.25 1.56 3.24

Operatingcashflow 15.34 10.68 11.92 8.41 14.41 9.21 10.57 6.15 7.42 6.67

Interestcover(timescoveredbynet 4.94 1.88 1.07 (0.39) 1.88 1.44 1.80 1.24 0.98 1.81

profitaftertaxation)

PortTaranakiLimitedadoptedNZIFRSfortheyearcommencing1July2006.Theearliestyearthathasbeenrestatedunder

NZIFRSforthecomparativesaboveis2006.

COMPARATIVE REVIEW DIRECTORY ‹DirectorsJohn Auld, ChairmanCraig Norgate, Deputy ChairmanPeter HortonRichard Krogh David MacLeodRoger Taylor MNZM

Company SecretaryBronwyn Clement

Executive ManagementRoy Weaver, Chief Executive

Bill Edie, Property & Infrastructure Manager (from 1 April 2013)

John Lehman, Business Services Manager (from 5 June 2013)

Guy Roper, Commercial Manager (from 19 August 2013)

Noel Henderson, Human Resource Manager

AuditorsDeloitte on behalf of the Auditor-General

BankersBank of New Zealand LimitedWestpac Banking Corporation

SolicitorsGovett Quilliam

Contact DetailsPort Taranaki Centre2-8 Bayly RoadPO Box 348New Plymouth 4340New Zealand Telephone: 64 6 751 0200Facsimile: 64 6 751 0886Website: www.porttaranaki.co.nzEmail: [email protected]

PoRt tARANAKI LIMItEDREPoRt 201342

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3 D - porttaranaki.co.nz...The new safety induction video was used to induct 1,100 people for the Port site. The feedback on this improved tool for educating Port users about safety