pnl annual report 2007 · return on average equity (%) 5.6% 6.1% 5.4% 6.6% 6.0% return on average...
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2 0 0 7 A N N U A L R E P O R T
H I G H L I G H T S F R O M T H E 2 0 0 7 F I N A N C I A L Y E A R
JULY 2006 Blessing of the Fleet at Wakefi eld Quay marking the centennial of the Cut,
1906-2006.
Marine Operations Manager Roy Skucek joined our staff, completing the
new line up of executives.
OCTOBER 2006 Cruise ship The World makes a port call - selecting Nelson as ‘clean, friendly
and a little bit different’.
NOVEMBER 2006 Paving of Brunt Quay completed.
The One Gate in Carkeek Street became fully operational, centralising
services and enhancing security.
Capital structure of the company reviewed, resulting in a share buy back,
delivering $25 million to the two shareholders, Nelson City and Tasman
District Councils.
DECEMBER 2006 Port Nelson Santa Parade marks the beginning of the festive season in
Nelson city.
FEBRUARY 2007 Open Day drew crowds to the port for displays and tours of the
operational area.
MARCH 2007 Port call from HMNZS Te Kaha.
Nelson Yacht Club celebrates 150 year anniversary.
Achieved ACC tertiary accreditation.
APRIL 2007 Tanker Taiko makes her last visit to Nelson before being withdrawn from
service.
Delivery of new Hyster hi-stacker, capable of lifting two empties at once.
Lifting record set by Liebherr cranes with 5749 moves for the month.
Paving laid in former TNL log yard near the port company offi ce.
MAY 2007 Port Nelson Blokes’ Day Out triathlon raced in wet conditions with
high number of entries.
JUNE 2007 The derelict fishing vessel SZAP 5 left port to be scuttled in Cook Strait.
Record container numbers and cargo tonnes handled for a full
fi nancial year.
JULY 2006
Marine Operations Manager Roy Skucek joined our staff, completing the
OCTOBER 200
NOVEMBER
The One Gate in Carkeek Street became fully operational, centralising
Capital structure of the company reviewed, resulting in a share buy back,
DECEMBER
FEBRUARY
MARCH
Nelson Yacht Club celebrates 150 year anniversary.
Achieved ACC tertiary accreditation.
APRIL
Delivery of new Hyster hi-stacker, capable of lifting two empties at once.
Paving laid in former TNL log yard near the port company offi ce.
MAY
JUNE
Record container numbers and cargo tonnes handled for a full
2
“During the Noise Variation process we have appreciated the support of many
parties who understand and acknowledge the importance of the port to the
wider community. It is pleasing to note this has come both from the business
community and many private householders, including a large number of
port hills residents themselves.”
Martin Byrne, Chief Executive , Port Nelson Limited.
Directors’ Report ..............................................................................................................................................................................4
Chief Executive’s Report ...............................................................................................................................................................6
Port Nelson in the Community ..................................................................................................................................................8
Environmental Matters ............................................................................................................................................................... 10
Port People ..................................................................................................................................................................................... 14
Governance .................................................................................................................................................................................... 15
Directors .......................................................................................................................................................................................... 16
Financial & Trade Highlights ..................................................................................................................................................... 17
Auditor’s Report ............................................................................................................................................................................ 18
Statutory Information ................................................................................................................................................................. 19
Statement of Corporate Intent ................................................................................................................................................ 21
Statement of Financial Performance and
Statement of Movements in Equity ....................................................................................................................................... 22
Statement of Financial Position .............................................................................................................................................. 23
Statement of Cashflows ............................................................................................................................................................. 24
Statement of Accounting Policies .......................................................................................................................................... 26
Notes to Accounts ........................................................................................................................................................................ 28
Directory .......................................................................................................................................................................................... 35
R E P O R T C O N T E N T S
3
D I R E C T O R S ’ R E P O R T
As Chairman of Port Nelson Limited I am
pleased to report another encouraging
result for the company during this past
financial year.
The net surplus after taxation and including
unrealised investment property gains
was $6.7 million, based around revenues
that were some $2.4 million ahead of budget, with the associated
operational expenses some $1.5 million higher than budget.
The main factors behind the increased revenue were:
• Higher than anticipated cargo volumes, particularly in the areas of
logs, vehicles, dairy products and wine
• A continued move towards further containerisation of cargo
previously carried in break bulk form, such as sawn timber
• A continued increase in property values, which then flowed through
into higher rental income.
The main areas of increase in operating expenses related to:
• Plant hire and wages – offset by increased activity
• Electricity charges – also offset by increased activity
• Maintenance costs associated with the replacement of a crane winch
gearbox on one of the Liebherr mobile cranes.
C A R G O A N D S H I P P I N G
Cargo volumes were the highest in the history of the company,
the final figure of 2.644 million tonnes being some 89,000 tonnes
ahead of budget. Log, vehicle, dairy and wine volumes were strong,
although once again slightly offset by lower than anticipated exports
of processed wood products and fruit.
The strong dairy and wine volumes, coupled with the movement of
greater amounts of sawn timber into containerised form, meant the
number of containers handled through the port exceeded 70,000 TEU
(Twenty Foot Equivalent Units) for the first time. The final figure of
71,815 is more than 10,000 TEU ahead of the previous twelve month
period.
O P E R A T I O N A L M A T T E R S A N D P O R T
D E V E L O P M E N T
Unlike recent years with significant investment in wharf upgrades and
the purchase of a new pilot boat, 2006/07 was very much focussed on
limited capital expenditure, mainly around pavement areas required
for container operations. The areas adjacent to Brunt Quay and on the
former SSL Receiving and Delivery site required significant pavement
improvements to deal with the increase in volumes being handled.
This reflects the bigger picture that many of the paved areas within the
port were not designed to handle the number of containers and heavy
operating machinery that we now deal with.
Aside from this work, the main investment was around the ‘One Gate’
project which saw us bring staff from three separate operational sites
into the new facility based at the Carkeek St entrance.
That this project was completed on time and under budget, was a
credit to all concerned. We have also continued to invest in new plant
with the purchase of a Hyster ECH forklift; and have continued to
upgrade our IT systems, flowing on from other projects in this area in
recent years.
The other major area of capital expenditure in the year related to
the buy back of buildings and operational land which had been
leased or owned by third parties. This was required to meet both
current operational requirements and to ensure we have suitable
developmental options open to us in the future.
4
F I N A N C I A L O U T T U R N A N D D I V I D E N D
The net surplus after taxation, including unrealised investment
property gains, resulted in a return on average shareholders funds
of approximately 5.6%. Dividends declared for the year will be
$3.9 million.
As was reported in late October of 2006, the Board of Port Nelson
Limited recommended proceeding with a share buy back which saw
a payment of $25 million being split between the two shareholders,
Nelson City Council and Tasman District Council.
This came as a result of a detailed review of the capital structure of
the company, with the focus being to achieve a structure more in line
with the port sector in general and to establish a level of shareholders’
funds that was more appropriate to the nature of the risks associated
with the port’s business.
As was mentioned in the 2006 Annual Report, the continued
rationalisation within the shipping industry remains a challenge for us,
as it is for many New Zealand ports. This was highlighted in the second
half of the financial year with the withdrawal of the Maersk Asian (NZ1)
service from Port Nelson.
We continue to make all efforts to ensure Nelson remains an attractive
port of call for overseas shipping lines but are also realistic, that as vessels
get larger there are likely to be further changes to existing services,
particularly for the smaller regional operations such as ourselves.
I would like to thank the senior management and all staff for the
excellent efforts over the last 12 months.
Our Finance Manager Murray Win retired after a number of years with
Port Nelson and there were also changes in directors’ positions during
the year.
Murray Sturgeon and Bob Dickinson, both long serving directors,
resigned during the latter half of 2006 and we thank them for the huge
contribution they have made to Port Nelson Limited over many years.
They have been replaced by Bronwyn Monopoli and Tim King and we
look forward to their contributions to the growth of the business in
coming years.
To the shareholders and fellow directors I thank you for your support
and commitment over the past year.
Nick Patterson
Chairman , Port Nelson Limited. 5
2007 2006 2005 2004 2003Operations Trade (Millions of Cargo Tonnes) 2.644 2.522 2.623 2.564 2.458Container Throughput (TEU’s)* 71,815 61,455 57,144 51,128 44,632Vessel Arrivals (Over 100GT) 997 1,012 1,178 1,267 1,470Total Vessel GT Calling (Millions) 9.0 8.6 8.4 9.2 9.7Employees (FTE’s) 132 141 143 125 121
Financial ($ Millions) Revenue** $33.0 $29.6 $27.7 $27.6 $25.4EBITDA *** $15.8 $15.3 $12.2 $13.8 $12.5Earnings Before Interest and Taxation (EBIT) $12.2 $11.6 $9.0 $10.6 $9.6Net Interest Expense $2.5 $1.5 $1.3 $1.0 $1.3Taxation $3.0 $3.1 $2.5 $2.9 $2.7Net Surplus After Taxation**** $6.7 $6.9 $5.2 $6.6 $5.6
2007 2006 2005 2004 2003
Financial ($ Millions) ...continued
Dividends Declared (Millions) $3.9 $5.3 $3.3 $9.2 $3.1
Capital Expenditure $4.0 $2.9 $7.3 $3.2 $2.9
Net Interest Bearing Debt $42.0 $16.5 $19.0 $16.5 $15.0
Total Tangible Assets $152.3 $149.6 $117.2 $114.2 $113.7
Shareholder Return Metrics
Earnings per Share (cents) 26.5 22.1 17.0 21.3 18.0
Dividend per Share(cents) 15.3 17.1 11.0 30.0 10.3
Net Assets per Share $4.31 $4.14 $3.15 $3.12 $3.18
Equity (%) 67.9% 82.1% 80.6% 81.2% 82.0%
Return on Average Equity (%) 5.6% 6.1% 5.4% 6.6% 6.0%
Return on Average Assets (%) 7.7% 8.3% 7.5% 8.9% 8.4%
P E R F O R M A N C E R E V I E W - P O R T N E L S O N L T D G R O U P
C H I E F E X E C U T I V E ’ S R E P O R T
C A R G O
Volumes through Port Nelson for the year
were the highest on record with logs,
motor vehicles, wine and dairy products
being particularly strong performers.
Total throughput for the 12 month period
was 2,644,000 tonnes, some 89,000
tonnes ahead of budget and around 122,000 tonnes up on the
previous year.
Log exports for the year were 22,000 tonnes ahead of budget at
636,000 tonnes and reflected the strong overseas demand for wood
throughout the majority of the financial year. Imported motor
vehicles (new and used) totalled 167,000 revenue tonnes as against
a budget of 136,000 tonnes and dairy (21,000 tonnes) and wine
(30,000 tonnes) also showed healthy increases on the figures twelve
months earlier.
Processed forestry exports were some 60,000 tonnes below budget,
with fruit exports and fertiliser and cement imports also being slightly
lower than had been anticipated.
Container numbers significantly increased once again with 71,815
TEU handled during that period as against 61,455 TEU twelve
months earlier.
This increase was on the back of a number of factors including the
following:
• Greater volumes of sawn timber being shipped in containers rather
than in break bulk form, particularly to the Asian region
• Increased wine and dairy exports through the port
• A further increase in LVL and MDF products being loaded into
containers.
S H I P P I N G
Vessel arrivals were marginally lower with 1,001 vessels calling during
the year as against 1,012 the previous year.
In late December the fortnightly Tasman Orient Line (TOL) service
ceased calling on the back of the traditional cargo base for this
service moving principally to containers and around the same time
the monthly Indotrans break bulk service to the US also ceased. In
mid June the regular Maersk relay service to Asia also ceased as part
of a nationwide review of their feedering service where they chose
to commence utilising transhipment operations with existing coastal
operators.
S T O R A G E / R E C E I V A L A N D D E L I V E R Y /
Q U A Y P A C K
The purchase of land previously leased by a third party on the western
side of Hay St in the second half of 2006 enabled us to secure extra
land for the storage of containers, which was urgently needed given
the significant growth in container traffic. Space was particularly
at a premium during the 2007 fruit export season and the efficient
operation of the Container Yard and Receiving and Delivery (R & D)
systems was a credit to all the staff involved in the cargo logistics
division of the business.
Our Quaypack division continues to go from strength to strength with
its packing and unpacking operations. The growth of wood products
moving into containers has certainly seen added demand for their
services.
In late 2006 our Cargo Team moved into the ‘One Gate’ facility on
Carkeek Street. The completion of this project on time and under
budget was a credit to all involved. The benefits of having all cargo
staff in one area have been everything we had hoped for and have
certainly assisted us during the busy peaks we experience from March
through to June.
S T E V E D O R I N G
In late 2006 a review was undertaken of our Stevedoring division,
Tasman Bay Stevedoring (TBS) to ascertain how we could improve the
performance of what has been for some time a marginal business. It is
fair to say that all stevedoring companies in Nelson have a reputation
for high levels of service and efficiency of operation but historically this
service has not attracted the returns available for similar operations in
other New Zealand ports. TBS has since worked through various issues
to achieve mutual benefits, where our major customers know they
have longevity of service and at the same time TBS is assured of the
return that makes it worthwhile staying in this line of work. A huge
amount of credit must go to Chris Shand, Digby Kynaston and the TBS
team who have worked so hard in meeting the targets laid down for
them, and I also express my sincere thanks for the efforts of our Chief
Commercial Officer, Parke Pittar, in driving this review process.
E N V I R O N M E N T A L I S S U E S
The Noise variation to the Nelson City Council Resource Management
Plan was notified in early June this year and we expect to commence
noise mitigation work on the affected properties in the coming
months. While no solution will ever meet with universal support we 6
believe the variation in its current form offers a solution that all parties
should be able to live with, and we remain committed to ensuring we
do everything possible on an ongoing basis to keep noise created
from port operations to an absolute minimum. During this process we
have appreciated the support of many parties who understand and
acknowledge the importance of the port to the wider community.
It is pleasing to note this has come both from the business community
and many private householders, including a large number of port hills
residents themselves.
The Environment Committee has continued to meet regularly over
the last 12 months. Following on from the recommendations of the
committee and our own board and management, the company
was recently successful in gaining ISO 14001 certification for our
environmental practices - the first major port in New Zealand to
attain this standard. Special note should be made of the efforts of our
Environmental Officer, Frances Woodhead, in driving this project to a
successful conclusion.
P L A N N I N G F O R T H E F U T U R E
The withdrawal of one of the Maersk services in mid June highlighted
the continued change apparent within the shipping industry in
New Zealand and overseas. If there is one thing that is sure, it is that
change will carry on for the foreseeable future. In 2001 P & O Nedlloyd
announced the introduction of the 4100 TEU container vessels to NZ
and Australia and now some lines are looking at bringing 6000 TEU
vessels to this part of the world, which will in all likelihood result in
fewer port calls and greater use of feedering services.
At this stage we believe the short to medium term future for regional
ports such as ours is one where there are a mix of direct callers and
lines choosing to utilise feeder operations. The challenge for us is to
ensure we have the facilities to handle those vessels, without over
investing in infrastructure that will struggle to generate a reasonable
return.
A C K N O W L E D G E M E N T S
I would like to once again express on behalf of myself and our
Executive Team our thanks to the Board of Port Nelson Limited for their
support and advice over the last twelve months and to thank our staff
who have all contributed to another solid performance.
As I have stated in previous years, I would also like to express our
appreciation to the importers and exporters of the region for their
support, and to the many shipping lines that PNL services. Your
support is vital to our continued success.
Martin Byrne
Chief Executive, Port Nelson Ltd.
7
“We work in a hectic environment in the peak fruit season and can’t always stick
to our plans. PNL staff understand our needs and allow for flexibility in working
hours and cargo volumes. I really value the personal relationships we have built
up over many years.”
Hans Krabo, Logistics Manager, ENZA International.
P O R T N E L S O N I N T H E C O M M U N I T Y
Export is the lifeblood of Nelson-Tasman and at Port Nelson we are
aware of the vital role we play as the ‘region’s gateway to the world’.
From forestry, seafood, fruit, wine and imports, the wellbeing of the
region as a whole is intrinsically linked to Port Nelson in some way.
The community ownership of Port Nelson Limited is reflected in the
strong role the company plays in the region in sports, arts, community
and business.
We are one of the region’s largest sponsors putting over $150,000 a
year into support for a number of events, groups and projects. This
year we continued to develop partnerships themed around the youth
in the community and saw excellent results - our funding of a coach for
the Nelson Rowing Club has seen the squad win gold at the Mardi Cup
and selected rowers competing for New Zealand in Beijing.
We continued to build on the success of the entry level multisport
event, the Port Nelson Blokes’ Day Out, with increased entries and
a large contingent from our own staff; we are in our third year of
sponsorship with the Tasman Makos as a First XV supporter of the
combined Nelson Marlborough side.
The third Nelson Port and Transport Industry Charity Golf Tournament
was held in November, attracting a capacity field, and providing an
opportunity for the industry to get together and raise money for the
very worthwhile cause of sending the Nelson Special Olympic Squad
to Beijing.
Out in the streets of the city we maintain a high profile with support
for the Port Nelson Santa Parade and the Port Nelson Masked Parade,
which opens the Nelson Arts Festival every year. Drawing crowds in
excess of 10,000 these are Nelson’s biggest participation events.
The Port Nelson Trust helps a wide range of community groups.
Over the past year funds were distributed by the trust to a range of
sports, community and arts projects.
In the business community our support for the Nelson economy
continues as a key stakeholder in the Nelson Regional Economic
Development Agency, a cornerstone sponsor of the Nelson-Tasman
Chamber of Commerce and supporter of the Nelson Bays Educational
Business partnership, with Infrastructure Manager Dick Carter chairing
the Nelson Engineering Group.
The amenities berth on Wakefield Quay is now home to the Nelson
Coast Guard, provided free of charge by Port Nelson to support this
vital service to the community, and we continue to allow public access
for fishing in this area.
8 Port Open Day, February 07.
9
Port Nelson’s support of the Nelson Marlborough Rescue Helicopter Trust ensures
that our volunteers receive vital training in water rescue and winch operation.
Our family of sponsors and the support of the community help provide a free
dedicated air rescue service, on call 24 hours a day, seven days a week.
Paula Muddle , Marketing and Communications Manager, Nelson Marlborough Rescue Helicopter.
P O R T N E L S O N S P O N S O R S H I P S
Community
Outward Bound youth programme
Port Nelson Santa Parade
Richmond Santa Parade
Motueka Hospital Trust
Port Nelson Masked Parade
Nelson-Tasman Rescue Helicopter
Blessing of the Fleet
Nelson Bays Youth Team Racing
School of Music Winter Festival
Mouteka Yacht & Cruising Club
Brightwater Food & Wine Festival
Port Nelson Trust
Business
Latitude Nelson
Chamber of Commerce
Fishing Association
Nelson Bays Education Business Partnership
Sealord Rescue Centre
Marine Farming Conference
Golfing Tournaments
Wood Processing Association
Nelson Engineering Cluster
Sports
Tasman Bay Rugby
Nelson Rowing
Port Nelson Big Bay Bike Ride
Beach Volleyball
Port Nelson Blokes Day Out
Tasman Sports Awards
Nelson Motor Cycle Racing
Portions of the Port Nelson information panels at Wakefield Quay.
E N V I R O N M E N T A L M A T T E R S
This year saw a significant progress in our environmental efforts at the
port, as we worked towards ISO 14001 Environmental Management
accreditation. The international standard is considered to be the most
stringent of all the accreditation systems available in New Zealand
for environmental management, and Port Nelson is the first major
New Zealand port to make the commitment to externally audited
continuous improvement in environmental management. Our first full
audit was held at the end of the financial year and the final certification
was issued some weeks later.
Reaching this point has meant having a long hard look at our existing
environmental management plan against the framework prescribed
by the standard. The Environmental Consultative Committee has
guided the process, advising on priority of environmental impacts and
contributing several of the new quantitative performance indicators.
As in previous years we extend a grateful thanks to this dedicated and
knowledgeable team of volunteers.
Auditors will continue to visit us on a regular basis to ensure we are
gathering information related to the meeting of our targets and
checking that procedures are working as described by the system.
I S O A C T I V I T I E S T H R O U G H T H E Y E A R
Environmental Policy Statement updated . . . . . . . . . . . . . . . . . . July 2006
Environmental Aspects Register and
scoring developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .August 2006
Internal environmental team convened. . . . . . . . . . . . . .September 2006
Staff training in auditing environmental
management systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .October 2006
Initial audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . November 2006
Baselines and performance targets reviewed . . . . . . . . . . February 2007
Plastics, paper and cardboard recycling introduced . . . . . .March 2007
Review of documents and record keeping . . . . . . . . . . . . . . . . April 2007
First full audit, update of Environmental Management Plan . . June 2007
I N D I C A T O R S O F P R O G R E S S
Our performance indicators are provided in both actual units and
in TEU (twenty foot container equivalent) to provide a measure of
efficiency improvements.
1 0
E N V I R O N M E N T A L M A N A G E M E N T P E R F O R M A N C E I N D I C A T O R S
Aspect Indicator Baseline Baseline 2005/6 2006/7
Environmental Policy Percentage of new permanent employees receiving environmental induction 0 23%
Fuel Fuel use (litres) per teu* of cargo handled. 8.34 (537,926 ) 8.08 (580,905)
Power Electricity use (kw hours)/per teu of cargo handled 65.7 (4,234,445) 63.89 (4,591,509)
Waste Waste generated per FTE **employee (m3) 2.8 (397.5) 2.75 (363)
Methyl Bromide Number of readings higher than the current OSH workplace standard
(19/mg/m3) in areas not cordoned off during fumigation or venting. 0 0
Quantity of Methyl Bromide used at Port Nelson (tonnes) 2.491 2.286
Noise Number of noise complaints 33 32
Oil Spills Number of oil spills when bunkering 1 3
Dust Number of dust complaints 8 9
Codes of Practice Number of audit reports completed 7 13
Number of non-conformances identified 6 7
Number of non conformances resolved 5 6
Continuous Improvement Number of targets reported on 4 15
Number of new initiatives Not recorded 19
Water Water use (m3)per teu (site use excl ships) 0.61 (39,478) 0.64*** (46,437)
* Twenty foot equivalent unit for 2005/6 = 64,455 for 2007/7 = 71,865** Full time equivalent employees 2006/7 132*** Increase due to water leak.
S Z A P 5 D I S P O S A L
The most unusual environmental project for the year was the sinking
of the SZAP 5, an abandoned but fully equipped 60 metre fishing
vessel - an undertaking that gave a whole new meaning to the concept
of ‘waste management’.
Following a long history of trying to get the owners to take responsibility
for the vessel and eventually securing the legal right to dispose of her,
our attempts to sell the vessel or get her broken up for scrap failed.
We had a liability on our hands, in a deteriorating condition, and in
December 2006 filed an application to Maritime New Zealand for a
permit for disposal at sea. Conditions of the permit included removing
all floatable items and contaminants - no small task on a fully equipped
32 berth fishing vessel.
The long process began with securing loose asbestos, pumping off
refrigerant used in the fish processing plant, removing diesel oil (for
recycling) from 13 fuel tanks and bilges and disposing of part-filled
drums of lube and other contaminants. In February, everything that
could float was removed from the ship. Serviceable items were resold,
unusual artifacts ended up on Trade Me and Nelsonians picked up
quirky Russian bargains at a garage sale. Stainless steel, metal and
even the bronze alloy propeller, were removed for recycling.
Preparations for towing included fitting bilge pump sensors and self-
powered navigation lights. There was a long wait for suitable weather
for the tow to the approved dumping ground beyond Cape Palliser in
Cook Strait, a 2000 metre trench used as a munitions dump. Disposal
of redundant vessels is becoming an increasing problem around the
world. The development of facilities to recycle ships and consideration
of their end of life during construction is required. The SZAP 5 was built
in Klaypeda, Russia in 1978.
E N V I R O N M E N T A L I S S U E S R E G I S T E R 2 0 0 6 / 7
A total of 61 incidents were recorded. The increase is due to improved
reporting following a review of the Issues Register code of practice,
and the introduction of the land-based spill trailer.
1 1
“Watching the SZAP 5 descend beneath the waves accompanied by a
tremendous crashing was a strangely beautiful experience. Thanks to our efforts,
no debris accompanied her sea burial. We can take some pride that in doing a job
we did not ask for, we managed to make the best of it.”
Frances Woodhead, Environmental Officer, Port Nelson Limited.
The new land-based spill trailer.
E N V I R O N M E N T A L M A T T E R S
N O I S E M A N A G E M E N T
Despite handling more containers we have had fewer noise complaints,
which is encouraging. However, clangs caused by empty containers are
still the biggest source of complaints, followed by ships’ generators.
Vigilance in stevedoring practices and training is ongoing. This year
several complaints related to a particularly large vessel, the Cosco
Melbourne; managing this ship will be easier when wharf repairs have
improved the workability of Main Wharf South. Another notable
noisy incident was an oil tanker inadvertently setting off her fire alarm
system in the very early morning.
Discussions continued with Nelson City Council on solutions to protect
residents from noise. Further information was provided by Port Nelson
Ltd and the proposed variation to the Nelson Resource Management
Plan has now been finalised for a public submission process.
F U M I G A T I O N
Numbers of shed fumigations remained the same, with a total of 12
over the 2006 summer season, when fumigation of export timber
to Australia is required. Additional health and safety monitoring
was done, to help identify changes that may be needed to current
operating practices.
The Nelson Air Quality Plan suggestion that fumigation at Port
Nelson be subject to resource consent remains under review. Some
progress was made through mediation between the operator and
the submitters, but no compromise was reached and a decision by an
Environment Court judge is awaited.
D R E D G I N G C O N S E N T R E N E W A L
Work has been underway to prepare an application to renew the port’s
maintenance dredging consent. Over 277,204 m3 of sediment are
1 2
carried down the region’s rivers and into Tasman Bay each year. Some
of this ends up in the channels and berth pockets making dredging an
essential annual task.
Dredging has been done since the early 1960s and careful study
of the impacts of the activity are part of the stringent monitoring
requirements of the existing resource consent, granted for 15 years in
1993. The results show no negative effects at the dumping ground and
have given us the confidence to apply for a 35 year consent, again with
careful monitoring conditions and a review period.
H A Z A R D O U S W A S T E S
Certification to comply with the new requirements under the
Hazardous Substances and New Organisms regulations was confirmed
in August 2006.
L O O K I N G A H E A D
Investing in ISO 14001 certification has improved the frameworks we
have in place. Over the coming year the focus will move from systems
to action, as we make progress in the targets set for noise, waste
minimisation, energy consumption and oil spill prevention.
In the key area of noise we intend to make offers of insulation to the
first 11 houses in the affected noise zone, by July 2008. Under the terms
of the Noise Variation we will also establish a noise liaison committee;
and budget provision has been made for reduction of noise at source.
The new code of practice for fumigation will help to ensure that we
continue to lead in minimising the risks associated with this aspect of
cargo handling, as exporters address quarantine regulations imposed
by overseas countries.1 3
“When the topic of Environmental Management systems came up at the
environment committee meetings we were able to indicate the benefits of
having an externally audited system and to share our experience, as Nelson Pine
Industries and TNL were both already ISO 14001 certified.”
Philip Wilson, Environmental Engineer, Nelson Pine Industries.
Port Nelson Environmental Committee.
Everyone’s contribution is vital to waste reduction initiatives.
P O R T P E O P L E
Port Nelson has a proud track record of a stable and skilled workforce,
with staff numbers steady over the past year with 93 permanent, fixed
term and part-time staff. Casual staff boosted the total hours worked to
the equivalent of 132 full-time equivalents. This year three staff members
reached the milestone of 25 years service bringing the total number of
‘silver servers’ to nine, one of whom has clocked up 44 years service.
H E A L T H A N D S A F E T Y
Port Nelson values its reputation for speed and efficiency in vessel
turnaround, but never at the expense of compromising the safety
of staff and on-site contractors. The Health and Safety Committee’s
‘bottom up’ approach encourages input and suggestions from all
staff members and ensures buy-in to safe working practices. The
committee has been operating now for over 17 years and represents
employees from all worksites within the port, as well as the CEO and
three members of the Executive Team.
L I F E S T Y L E P R O G R A M M E S
A range of health checks are offered to staff. All permanent staff and
some casuals have their hearing and vision checked annually by an
occupational health provider. Identified employees in certain work
areas are given lung function tests and some employees have regular
blood tests to detect substances such as heavy metals or fumigants. A
new initiative this year was ergonomic assessments for all the forklift
drivers in the Cargo Logistics division.
In 2006 we trialled a ‘Health and Wellbeing’ programme, where all
permanent staff and qualifying casuals could claim $500 to improve
their physical health, educational and personal development or
emotional wellbeing. There has been an excellent uptake with staff
applying to spend their wellness dollars on such items as gym
memberships, computer equipment, tramping gear, massage therapy,
life coaching, night school fees and bicycles.
For several years we have undertaken pre-employment drug tests for
permanent and casual staff; as well as ‘incident and reasonable cause’
drug and alcohol testing, to further enhance workplace safety standards.
In early autumn each year we offer free ‘flu injections’ to all permanent
staff, and in late spring staff are offered a melanoma skin check at an
on-site GP clinic. Other Sun Smart measures are the provision of hats
and sunscreen to outdoor workers.
Our Employee Assistance Programme continues to support staff with
counselling services for work or other matters. This service is offered
to employees at no cost by a contracted professional organisation.
We have a subsidized medical insurance scheme in place, we continue to
offer a number of retirement seminars each year and we offer company-
subsidised superannuation schemes for all permanent waged staff.
L O S T T I M E I N J U R I E S ( L T I ’ S )
We are pleased to report a small decrease in LTI’s over the past year,
down from twelve to nine. Our target LTI frequency rate of 1.5% was
not met, with an end of year result of 3.27%. A port is a workplace with
inherent dangers and the potential for ‘human error’. Any accidents
are thoroughly investigated and new safety measures are added to our
prevention programme where necessary. We remain committed to our
long-term company goal of ‘Together towards Zero’ (LTI’s).
A C C I D E N T C O M P E N S A T I O N
Port Nelson Ltd is an Accredited Employer in the Work Safety and
Management Practices Programme, and successfully met the tertiary
level for the first time when we were audited in early 2007 - an
achievement that gives us a great sense of pride and accomplishment.
We continue to be a ‘reimbursing employer’ and we value the ability to
have employees remain on the payroll system with all wage and salary
deductions continuing without interruption.
S U P P O R T I N G S T A F F E N D E A V O U R S
The number of sports events that we compete in as a company is
growing. In May a large staff team competed in the third Port Nelson
Blokes’ Day Out, with a social event to follow; and we supported
female staff to enter the Taylors’ Women’s Triathlon. Staff were helped
to attend out of town representative sports events and to support
local sports clubs and teams. Staff were also given support to attend
professional and personal development courses.
C O M M U N I C A T I O N
All staff receive the company magazine RePort Nelson, which includes
the ‘Safe Harbour’ feature, with a focus on health and safety matters.
Safe Harbour includes the results of a scheme that rewards staff
who report ‘near misses’ by putting them in a draw for a night
out at the movies complete with a café voucher. This year we
introduced an internal newsletter with input from all departments.
This has been well received and covers a wider range of subjects
- from new machinery to the results of sports’ sweepstakes.
Summaries of monthly incident reporting are regularly posted on staff
noticeboards along with safety messages. We have had good feedback
on the noticeboard at the port gate, which records the number of days
since the last lost time injury.
1 4
T R A I N I N G
We undertook organisation-wide training with a management
consultant at the end of 2006, with the aim of improving our internal
communications and enhancing our workplace culture. The staff
newsletter was one result and we also went through a ‘starfish’
exercise, where staff were challenged to come up with a six week
project that would make a positive difference in their work area. There
have been ongoing updates for forklift drivers, first aid certification
refresher training, seasonal induction for casual staff, and staff have
also attended business, administration, supervisory, legal compliance
and administration courses throughout the year. Marine staff have
been to Launceston in Australia for port simulator training, senior staff
have been supported in tertiary study in commerce and engineering,
and we have continued to send two staff members per year to the
Outward Bound eight day ‘Navigator’ course.
G O V E R N A N C E
The Finance and Risk Committee and Remuneration Committees met
as required by their respective Terms of Reference and have been
effective in terms of dealing with matters that may not warrant full
Board attention. Both committees report to the Board.
D I R E C T O R C H A N G E S
During the year two well known directors retired, Messrs Dickinson and
Sturgeon. Mr Dickinson had served on the Port Nelson Board for 12 years
and Mr Sturgeon 16 years. In September 2006 Mr Sturgeon was replaced
by Bronwyn Monopoli and in December Mr Dickinson was replaced by
Tim King. Ms Monopoli is a Nelson based Chartered Accountant and Mr
King Deputy Mayor of Tasman District Council. Both new Directors bring
considerable complementary experience to the Board.
B O A R D A N D S U B C O M M I T T E E C O M P O S I T I O N
A S A T 3 0 J U N E 2 0 0 7
Board
Nick Patterson (Chair)
Phil Lough (Deputy Chair)
Tim King (Deputy Mayor Tasman District Council)
Paul Matheson (Mayor Nelson City Council)
Peter Schuyt (CFO NZ Post Group)
Bronwyn Monopoli (Principal – Bronwyn Monopoli Chartered
Accountants)
Finance and Risk Committee
Peter Schuyt (Chair)
Bronwyn Monopoli (Director)
Martin Byrne (Chief Executive Officer)
Parke Pittar (Chief Commercial Officer, Company Secretary)
Remuneration Committee
Nick Patterson (Chair)
Phil Lough (Director)
Meeting attendance
Meeting type Board Finance and Risk Remuneration
Meetings held. . . . . . . . . . . 11 . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . .1
B Dickinson* . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . .
T King*. . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P Lough. . . . . . . . . . . . . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
P Matheson* . . . . . . . . . . . .10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B Monopoli . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . 1 . . . . . . . . . . . . . . . . . .
N Patterson . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
P Schuyt . . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . .
M Sturgeon . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
* Attendance includes any meeting attended by alternates.
F U R T H E R G O V E R N A N C E P R O G R E S S
During the year a Delegated Authorities Policy was developed. The
policy’s aim is to ensure there is appropriate control over expenditure
limits and provide for delegation when key Authorised Signatories
may be absent. The policy brought together some existing policy
directives in addition to allowing for a review of best practice as it
related to Port Nelson Ltd.
Additionally, in September 2006 the Risk Framework was finalised
providing management and the Board with an up to date risk profile
related to Port Nelson’s specific risks.
At the end of the Financial Year the final stages were being completed
on an updated Fraud Policy, thus ensuring that an appropriate
framework is in place to manage any suspected fraudulent events
should they occur.
Port Nelson’s Governance Framework continues to be reviewed and
enhanced where appropriate on an annual basis.
1 5
“I’m proud to work for a company that takes good care of its people and provides
an all-round engaging, stimulating, positive work environment.
There are challenges, but our people are the heart of the company - we’ve got
strong social networks and we have fun!”
Karen Barnett, HR & Quality Manager, Port Nelson Limited (left)
with team members Jim Lane and Suzanne Thompson.
D I R E C T O R S
N I C K P A T T E R S O NNick is the Managing Director of Wai-West Horticulture Ltd, which has extensive
horticultural plantings and post harvest facilities. Wai-West manages Fruit Logistics
(Nelson) Ltd, providing coolstorage and associated services for around 25% of the
Nelson pipfruit industry.
P A U L M A T H E S O NPaul is the Mayor of Nelson City and an experienced business manager.
His ex officio positions include directorships of Nelson Airport Ltd and Trustee of
Cawthron Institute. He chairs the nationwide Mayors’ Taskforce for Jobs and is actively
involved in many wider community organisations.
P H I L L O U G HPhil is currently Chair of NZ Trade & Enterprise and a range of other NZ companies.
He was previously CEO of the Sealord Group and is based in Nelson.
T I M K I N GTim is Deputy Mayor of the Tasman District Council and chairs their Corporate
Services committee. He farms on the Waimea Plains and has governance roles on a
range of community organisations including chairing the Waimea Rural Fire
Authority and the Wakefield & Community Health Centre Trust.
P E T E R S C H U Y TPeter is Chief Financial Officer for the New Zealand Post Group. He is also a director of a
number of companies in that group. Prior to his current role, Peter was CFO of the New
Zealand Dairy Board.
B R O N W Y N M O N O P O L IBronwyn is a chartered accountant, with her Richmond based practice
providing specialist accounting and financial advice to mainly rural businesses.
She is also a director of a number of Crown and other companies, and a trustee of
various arts-related organisations.
1 6
1 7
F I N A N C I A L R E P O R T 2 0 0 7
FINANCIAL HIGHLIGHTS
2007 2006 $Millions $Millions
Revenue $33.0 $29.6
Net Surplus After Taxation* $6.7 $7.6
Dividend $3.9 $5.3
Basic Earnings per Ordinary Share 26.5¢ 22.1¢
Return on Average Shareholders’ Funds 5.6% 6.1%
Net Asset Backing per Share $4.31 $4.14¢
Dividend - Recommended per Share 15.3¢ 17.1¢
Return on Average Total Assets** 7.7% 8.3%
Ratio of Shareholders’ Funds to
Total Assets 67.9% 82.1%
TR ADE HIGHLIGHTS
2007 2006
Cargo Tonnes 2.64M 2.52M
Vessel Arrivals 997 1,012
Container Throughput (TEU’s) 71,815 61,455
* Including Investment Property Revaluation
** Based on EBIT
1 8
AUDIT REPORT
TO THE READERS OF PORT NELSON LIMITED’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007
The Auditor-General is the auditor of Port Nelson Limited (the company). The Auditor-General has appointed me, Scott Tobin, using
the staff and resources of Audit New Zealand, to carry out the audit of the financial statements of the company, on his behalf, for the
year ended 30 June 2007.
Unqualified opinion
In our opinion:
• The financial statements of the company on pages 22 to 42:
- comply with generally accepted accounting practice in New Zealand; and
- give a true and fair view of:
• the company’s financial position as at 30 June 2007; and
• the results of its operations and cash flows for the year ended on that date.
• Based on our examination the company kept proper accounting records.
The audit was completed on 10 September 2007, and is the date at which our opinion is expressed.
The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board of Directors and the Auditor, and
explain our independence.
Basis of opinion
We carried out the audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing
Standards.
We planned and performed the audit to obtain all the information and explanations we considered necessary in order to obtain reasonable
assurance that the financial statements did not have material misstatements, whether caused by fraud or error.
Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the
financial statements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.
The audit involved performing procedures to test the information presented in the financial statements. We assessed the results of
those procedures in forming our opinion.
Audit procedures generally include:
• determining whether significant financial and management controls are working and can be relied on to produce complete and
accurate data;
• verifying samples of transactions and account balances;
• performing analyses to identify anomalies in the reported data;
• reviewing significant estimates and judgements made by the Board of Directors;
• confirming year-end balances;
• determining whether accounting policies are appropriate and consistently applied; and
• determining whether all financial statement disclosures are adequate.
We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements.
We evaluated the overall adequacy of the presentation of information in the financial statements. We obtained all the information and
explanations we required to support our opinion above.
Responsibilities of the Board of Directors and the Auditor
The Board of Directors is responsible for preparing financial statements in accordance with generally accepted accounting practice
in New Zealand. Those financial statements must give a true and fair view of the financial position of the company as at 30 June 2007.
They must also give a true and fair view of the results of its operations and cash flows for the year ended on that date. The Board of
Directors’ responsibilities arise from the Port Companies Act 1988 and the Financial Reporting Act 1993.
We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you. This
responsibility arises from section 15 of the Public Audit Act 2001 and section 19 of the Port Companies Act 1988.
Independence
When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the
independence requirements of the Institute of Chartered Accountants of New Zealand.
Other than the audit, we have no relationship with or interests in the company.
S M Tobin
Audit New Zealand
On behalf of the Auditor-General
Christchurch, New Zealand
1 9
S T A T U T O R Y I N F O R M A T I O NT o s h a r e h o l d e r s , o n t h e a f f a i r s o f P o r t N e l s o n L i m i t e d
f o r t h e Y e a r E n d e d 3 0 J u n e 2 0 0 7
P R I N C I P A L A C T I V I T I E S
Port Nelson Limited (“the Company” or “Port Nelson”) is primarily engaged in the commercial operation of the Port of Nelson. There has been
no significant change in the nature of the Company’s business during the year.
R E V I E W O F A C T I V I T I E S
A review of the year’s operations is contained in the Chairman’s Report and the Chief Executive Officer’s Review.
R E V I E W O F O P E R A T I O N S
The surplus for the Company for the year was $6.725 million. (2006 $7.587 million)
D I V I D E N D S
Dividends of $6,600,000 were paid or provided for during the year. ($2,700,000 final dividend for 2006 financial year, $1,000,000 interim dividend
for 2007 financial year, and a provision for $2,900,000 final for 2007 financial year)
D I R E C T O R S
In accordance with the Company’s constitution Messrs P K Matheson and T B King will retire by rotation.
R E M U N E R A T I O N O F D I R E C T O R S
Fees paid to Directors during the year were as follows:
A O Patterson $43,045
R G Dickinson $11,423
T B King $11,500
P V Lough $23,395
P K Matheson $21,925
B A Monopoli $17,880
M G Sturgeon $5,725
P M Schuyt $23,868
TOTAL $158,761
M G Sturgeon resigned in September 2006.
B A Monopoli was appointed in September 2006.
R G Dickinson resigned in December 2006.
T B King was appointed in December 2006.
D I R E C T O R S ’ I N S U R A N C E
The Company has arranged policies of Directors’ Liability Insurance to ensure that as far as possible Directors will not personally incur any
monetary loss as a result of actions undertaken by them as Directors. Certain actions are specifically excluded, for example the incurring of
penalties and fines that may be imposed in respect of breaches of the law.
D I R E C T O R S ’ I N T E R E S T
The following notices have been received from Directors disclosing their interests in other companies with whom the group may have
transactions. All transactions with these companies are conducted on normal commercial terms.
• Mr T B King is Deputy Mayor of Tasman District Council, which is a shareholder of the Company.
• Mr P K Matheson is Mayor of Nelson City, which is a shareholder of the Company.
• Ms B A Monopoli is a Director of the Cawthron Institute that sell services to the Company.
• Mr A O Patterson is a Director of Cold Storage Nelson Ltd that leases land and purchases services from the Company.
• Mr P M Schuyt is a Director of ECN Ltd and Express Couriers Ltd that sell services to the Company.
D I R E C T O R S ’ L O A N S
There were no loans by the Company to Directors.
The Statement of Accounting Policies and Notes to the Accounts on pages 26 to 42 form part of these Financial Statements.
2 0
S T A T U T O R Y I N F O R M A T I O NT o s h a r e h o l d e r s , o n t h e a f f a i r s o f P o r t N e l s o n L i m i t e d
f o r t h e Y e a r E n d e d 3 0 J u n e 2 0 0 7
S H A R E H O L D I N G B Y D I R E C T O R S
No Directors hold shares in the Company.
U S E O F C O M P A N Y I N F O R M A T I O N
During the year the Board received no notices from Directors requesting to use Company information received in their capacity as Directors that
would not otherwise have been available to them.
C O M M I T T E E S O F T H E B O A R D
The Board has established a Finance and Risk Committee to assist the Board in carrying out its responsibilities under the Companies Act 1993 and
the Financial Reporting Act 1993, and a Remuneration Committee.
A U D I T O R S
Under section 15 of the Public Audit Act 2001 and section 19 of the Port Companies Act 1988, the Auditor General is the Auditor of the Company.
The Auditor General has appointed Audit New Zealand to undertake the audit on its behalf. Fees paid to the Auditors are disclosed in the
Financial Statements.
P E R F O R M A N C E I N D I C A T O R S
As required under Section 16 of the Port Companies Act 1988, performance indicators in the Statement of Corporate Intent are given on
page 21.
D O N A T I O N S
Donations made during the year are disclosed in the Financial Statements.
E M P L O Y E E R E M U N E R A T I O N
The Company has remuneration agreements including benefits with employees in excess of $100,000 per annum in the following bands:
Remuneration Number of Employees
2007 2006
$100,000 to $110,000 3 3
$110,000 to $120,000 - 1
$120,000 to $130,000 3 2
$130,000 to $140,000 1 -
$150,000 to $160,000 - 1
$160,000 to $170,000 1 -
$190,000 to $200,000 - 1*
$210,000 to $220,000 1* -
$240,000 to $250,000 1 1
* Employee retired during year
C H A N G E S I N A C C O U N T I N G P O L I C I E S
There have been no changes in accounting policies during the financial year.
Chairman of Directors Director
For and on behalf of the Board
Date: 7 September 2007
The Statement of Accounting Policies and Notes to the Accounts on pages 26 to 42 form part of these Financial Statements.
2 1
S T A T E M E N T O F C O R P O R A T E I N T E N T
M I S S I O N S T A T E M E N T
• To operate the Company as a successful business providing cost efficient, effective and competitive services and facilities for port users and
shippers.
• To provide for the present and future needs of the Company in ways that are sensitive to people, use resources wisely, and are in harmony with
the environment of an export port.
O B J E C T I V E S
1. To operate as a successful business.
2. To be a good employer.
3. The debt equity ratio not to exceed 66.67% (40/60).
4. To aim to grow the business through stimulation of throughput, added value services and related business activities, so leading to increased
revenue.
5. To achieve a commercially acceptable rate of return on shareholders’ funds in accordance with meeting the objectives herein.
6. To ensure that Port development takes place which meets the needs of the region.
7. To ensure that adequate environmental standards are maintained.
8. To strive for continuous improvement in everything that we do.
M E A S U R E O F P E R F O R M A N C E A G A I N S T O B J E C T I V E S
The 2005 figures are not comparable with 2006 and 2007 as the 2006 and 2007 financial information was prepared in accordance with NZ IFRS.
Target 2007 2006 2005 Target Met?
Lost Time Injury Frequency Rate * <1.5 3.3 4.1 1.7 No
Net Debt / Equity Ratio <66.67% 36.3% 12.9% 19.4% Yes
Dividends Declared $3.9m $3.9m $5.3m $3.4m Yes
Cargo Throughput (Cargo Tonnes) 2.55m 2.64m 2.52m 2.62m Yes
Shipping Tonnes (Gross Tonnes) 9.9m 9.0m 8.6m 8.4m No
Ships Visits 1005 997 1012 1178 No
Revenue $29.9m $33.02m $29.6m $27.7m Yes
Return on Average Shareholders Funds 9.0% 5.6% 6.1% 5.4% No
Return on Funds Employed 7.0% 8.3% 8.8% 7.9% Yes
Capital Expenditure <$7.0m $4.0m $2.9m $7.3m Yes
Incidents Leading to Pollution of Harbour Nil 3 Nil Nil No
Compliance with all Resource Consent Conditions Full Full Full Full Yes
Compliance with NZ Maritime Safety Standards Full Full Full Yes
* Lost Time Injury Frequency Rate = Lost Time Injuries
Hours Worked in Period x 100,000
The Statement of Accounting Policies and Notes to the Accounts on pages 26 to 42 form part of these Financial Statements.
2 2
I N C O M E S T A T E M E N Tf o r t h e Y e a r E n d e d 3 0 J u n e 2 0 0 7
The Statement of Accounting Policies and Notes to the Accounts on pages 26 to 42 form part of these Financial Statements.
Notes 2007 2006 $000 $000
R E V E N U E
Operations 27,864 25,364
Property 5,159 4,902
TOTAL REVENUE 1 33,023 30,266
E X P E N S E S
Operations and Property 20,767 18,673
Financing 2,513 1,564
TOTAL EXPENSES 2 23,280 20,237
O P E R A T I N G S U R P L U S 9,743 10,029
Reversal of Prior Year Building Asset Write Down Impairment - 699
NET SURPLUS BEFORE TAXATION 9,743 10,728
Less Taxation Expense 3 3,018 3,141
N E T S U R P L U S 6,725 7,587
S T A T E M E N T O F M O V E M E N T S I N E Q U I T Yf o r t h e Y e a r E n d e d 3 0 J u n e 2 0 0 7
2007 2006 $000 $000
Opening Equity 128,405 128,380
Movements in Hedging Reserve 6h 812 139
Revaluations 6f 2,563 -
Net Surplus 6,725 7,587
Total Recognised Revenues and Expenses for the Period 10,100 7,726
Distribution to Owners 6b (3,900) (7,700)
Share Repurchase 6a (25,000) -
C L O S I N G E Q U I T Y 109,605 128,405
2 3
S T A T E M E N T O F F I N A N C I A L P O S I T I O Nf o r t h e Y e a r E n d e d 3 0 J u n e 2 0 0 7
The Statement of Accounting Policies and Notes to the Accounts on pages 26 to 42 form part of these Financial Statements.
Notes 2007 2006 $000 $000
C U R R E N T A S S E T S
Cash and Cash Equivalents 7 2,170 2,484
Trade and Other Receivables 8 3,518 3,011
Inventories 9 394 363
Prepayments and Accruals 361 343
Tax Refund Due - 32
Properties Intended for Sale 5 394 -
Hedging Asset 13 1,290 78
8,127 6,311
L E S S C U R R E N T L I A B I L I T I E S
Trade and Other Payables 10 1,721 1,452
Employee Benefit Liabilities 17 1,103 1,050
Tax Payable 69 -
Dividend Payable 6b 2,900 2,700
5,793 5,203
W O R K I N G C A P I T A L 2,334 1,108
N O N - C U R R E N T A S S E T S
Property, Plant and Equipment 11 137,960 135,627
Intangible Assets 12 742 709
Investment Properties 5 14,311 13,983
153,013 150,319
N O N - C U R R E N T L I A B I L I T I E S
Employee Benefit Liabilities 17 190 202
Deferred Tax liability 4 3,552 3,820
Term Loan 13, 14 42,000 19,000
45,742 23,022
T O T A L N E T A S S E T S 109,605 128,405
S H A R E H O L D E R S F U N D S
Issued Capital 6a 6,046 31,046
Retained Earnings 6b 31,860 29,035
Asset Revaluation Reserves 6f 70,835 68,272
Hedging Reserve 6h 864 52
T O T A L S H A R E H O L D E R S ’ F U N D S 109,605 128,405
Chairman of Directors Director
For and on behalf of the Board
Date: 7 September 2007
2 4
S T A T E M E N T O F C A S H F L O W Sf o r t h e Y e a r E n d e d 3 0 J u n e 2 0 0 7
The Statement of Accounting Policies and Notes to the Accounts on pages 26 to 42 form part of these Financial Statements.
2007 2006 $000 $000
C A S H F L O W S F R O M O P E R A T I N G A C T I V I T I E S
Cash was provided from:
Receipts from Customers 27,241 25,851
Rent Received 4,447 4,187
Interest Received 107 67
31,795 30,105
Cash was applied to:
Payments to Suppliers and Employees (16,693) (15,020)
Interest Paid (2,604) (1,540)
Taxes Paid (3,176) (3,310)
Net GST Paid (70) 115
(22,543) (19,755)
Net Cash In Flows from Operating Activities 9,252 10,350
C A S H F L O W S F R O M I N V E S T I N G A C T I V I T I E S
Cash was provided from:
Property Plant and Equipment Sold 170 42
Cash was applied to:
Purchase of Property Plant Equipment and Intangibles (4,036) (2,891)
Net Cash Out Flows from Investing Activities (3,866) (2,849)
C A S H F L O W S F R O M F I N A N C I N G A C T I V I T I E S
Cash was provided from:
Loans Raised 25,000 -
Cash was applied to:
Loans Paid (2,000) -
Shares Purchased and Cancelled (25,000) -
Dividend Paid (3,700) (5,000)
Net Cash Out Flows from Financing Activities (5,700) (5,000)
Net Increase/(Decrease) in Cash Held (314) 2,501
Cash at 1 July 2,484 (17)
C A S H A T 3 0 J U N E 2,170 2,484
Represented by:
Cash at Bank 269 585
Deposits 1,901 1,899
C A S H A T 3 0 J U N E 2,170 2,484
2 5
S T A T E M E N T O F C A S H F L O W Sf o r t h e Y e a r E n d e d 3 0 J u n e 2 0 0 7
The Statement of Accounting Policies and Notes to the Accounts on pages 26 to 42 form part of these Financial Statements.
2007 2006 $000 $000
R E C O N C I L I A T I O N W I T H N E T S U R P L U S
Net Surplus 6,725 7,587
Add Non Cash Items:
Depreciation and Amortisation 3,636 3,736
Impairment - 194
Increase (Decrease) in Deferred Tax (268) (143)
Deferred Tax Movement Taken Direct to Equity 9 -
Less:
Reversal of Prior Year Building Asset Write Down Impairment - (699)
Unrealised Gains (722) (712)
2,655 2,376
Add (Less) Movements in Other Working Capital Items:
(Increase)/Decrease in Accounts Receivable (451) 583
Increase/(Decrease) in Accounts Payable (excluding Assets Payable) 372 (144)
Increase/(Decrease) in Current and Non Current Employee Benefit Liabilities (12) (87)
Increase/(Decrease) in Tax Payable 101 (26)
(Increase)/Decrease in Inventory (31) 73
(Increase)/Decrease in Net GST (70) 115
(Increase)/Decrease in Prepayments and Accruals (18) (99)
(109) 415
Add (Less) Items Classified as Investing Activities:
(Profit) Loss on Sale of Assets (19) (28)
N E T C A S H I N F L O W F R O M O P E R A T I N G A C T I V I T I E S 9,252 10,350
2 6
S T A T E M E N T O F A C C O U N T I N G P O L I C I E S
R E P O R T I N G E N T I T Y
Port Nelson Limited is a public company registered under the Companies Act 1993 and created pursuant to the Port Companies Act 1988.
Port Nelson is a reporting entity in terms of the Financial Reporting Act 1993. The financial statements of Port Nelson have been prepared in
accordance with the Financial Reporting Act 1993.
B A S I S O F P R E P A R A T I O N
The financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (‘NZ GAAP’). They
comply with New Zealand equivalents to International Financial Reporting Standards (‘NZ IFRS’) and other applicable reporting standards as
appropriate for profit orientated entities.
The financial statements are presented in New Zealand dollars and the functional currency of Port Nelson is New Zealand dollars.
The financial statements were authorised for issue by the Directors on the 7 September 2007.
S T A N D A R D S A N D I N T E R P R E T A T I O N S I S S U E D A N D N O T Y E T A D O P T E D
There are no standards, interpretations and amendments that have been issued, but are not yet effective other than NZ IFRS 7 and 8, that Port
Nelson has not yet applied. When effective these standards will require additional disclosures in the financial statements.
A C C O U N T I N G P O L I C I E S
Unless otherwise stated, all accounting policies applied are consistent with those of the prior year. Where appropriate, comparative figures have
been amended to accord with the current year’s presentation and disclosure.
M E A S U R E M E N T S Y S T E M
Those accounting principles considered appropriate by the New Zealand Institute of Chartered Accountants for the measurement and reporting
of results and financial position under the historical cost method, modified by the revaluation of land, buildings, wharves, and investment
property, have been followed.
R O U N D I N G O F A M O U N T S
Amounts in this report have, unless otherwise indicated, been rounded to the nearest one thousand dollars.
S P E C I F I C A C C O U N T I N G P O L I C I E S
The accounting policies adopted in the financial statements, which have a significant effect on the result and the financial position disclosed are
set out below:
1.1 Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to Port Nelson and that revenue can be
reliably measured as follows:
Cargo and Marine revenue – is recognised based on departure of the vessel.
Stevedoring – is recognised based on partial completion of the vessel at balance date.
Property lease revenue – is recognised on an accrual basis at balance date. Rentals are payable in advance.
Interest revenue – is recognised on a time proportion basis using the effective interest method.
1.2 Provisions
Provisions are recognised when a present obligation exists as a result of a past event, the future sacrifice of economic benefits is probable,
and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.
1.3 Property, Plant and Equipment and Depreciation
Property, Plant and Equipment, except land, buildings, and wharves, are stated at valuation taken over from the Nelson Harbour Board
on 1 October 1988 and subsequent additions at cost. Depreciation is written off depreciable assets on a straight line basis over the
estimated economic lives of the assets, ranging as follows:
Years Years
Wharves, Quays and Berths 20-65 Buildings 50-100
Vessels 20 Cranes 15-20
Forklifts 15-25 Tractors and Vehicles 10
Sundry Plant and Equipment 5-20 Navigation and Pilot Equipment 10-40
Office Equipment 5-15 Hard Standing 50
Software 5
Capital dredging is not amortised. The cost of maintaining the dredged depth is expensed. Land is valued at least every three years.
2 7
S T A T E M E N T O F A C C O U N T I N G P O L I C I E S
Land is included at the valuation as at 1 July 2005 except for, (a) reclaimed land for which title has recently been received and has been
revalued as at 30 June 2007, and, (b) investment property which is included at fair value being the market value of the lessor’s interests
as at 30 June 2007, and is valued annually. Land owned and leased to third parties (other than investment property) is valued at the
market value of the lessor’s interests. Non leased land is recorded at market value. Additions between valuations are recorded at cost.
The land valuation was completed by Ian McKeage, Registered Valuer, FNZIV, FPINZ of TelferYoung.
Buildings are stated at fair value. Fair value was determined as at 1 July 2005 using either a market based approach (where evidence
can be reliably analysed) or optimised depreciated replacement cost. Additions between valuations are recorded at cost. Buildings are
valued at least every five years. The buildings valuation was completed by Ian McKeage, Registered Valuer, FNZIV, FPINZ of TelferYoung.
Wharves are stated at fair value as determined by a Chartered Professional Engineer employed by Port Nelson and reviewed by Ian
McKeage, Registered Valuer, FNZIV, FPINZ of TelferYoung. Fair value was determined as at 1 July 2005 using optimised depreciated
replacement cost. Wharves are valued at least every five years. Additions between valuations are recorded at cost.
The asset classes that are subject to revaluation are assessed at each balance date to ensure that the values are not materially different
from fair value. Where the carrying value is materially different from fair value a revaluation is undertaken.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses are
included in the Income Statement. When revalued assets are sold, the amounts included in asset revaluation reserves in respect of
those assets are transferred to retained earnings.
Cost incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service
potential associated with the item will flow to Port Nelson and the cost of the item can be reliably measured.
1.4 Investment Properties
Investment Property which is property held to earn rentals and/or capital appreciation is measured at its fair value at the reporting
date. Gains or losses from changes in the fair value of Investment Property are included in the profit or loss in the period in which they
arise. Investment Properties are not depreciated.
1.5 Cash and Cash Equivalents
Cash and Cash Equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of outstanding
bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
1.6 Trade and Other Receivables
Trade and Other Receivables are valued at fair value and subsequently measured at amortised cost using the effective interest method,
less any provision for impairment.
A provision for the impairment of receivables is established when there is objective evidence that all amounts due will not be able to
be collected as per the original terms of the receivables. The amount of the provision is the difference between the assets carrying
amount and the present value of estimated future cash flows, discounted using the effective interest method.
1.7 Inventories
Inventory is valued at the lower of cost using the weighted average method and net realisable value. Full provision has been made for
obsolescence where applicable. Stock is held for internal maintenance and construction work only.
1.8 Intangible Assets
Intangible Assets are limited to computer software. On acquisition they are capitalised at cost which equates to fair value. The
computer software will have a finite life. Amortisation is to be charged to the Income Statement based on the finite life of the asset.
Software is amortised on a straight line basis over five years.
Intangible Assets will be tested for impairment where an indicator of impairment exists and useful lives will be assessed on an annual
basis.
1.9 Impairment of Assets
At each reporting date, Port Nelson reviews the carrying amount of its Tangible and Intangible Assets to determine whether there is
any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if any).
Where the carrying amount of the asset exceeds its recoverable amount the asset is considered impaired and is written down to its
recoverable amount. For revalued assets the impairment loss is recognised against the Revaluation Reserve for that class of asset.
Where that results in a debit balance in the Revaluation Reserve, the balance is recognised in the Income Statement. For assets not
carried at a revalued amount the impairment loss is recognised in the Income Statement.
The reversal of an impairment loss on a revalued asset is credited to the Revaluation Reserve. However, to the extent that an impairment
loss for that class of asset was previously recognised in the Income Statement, a reversal of the impairment loss is also recognised in the
Income Statement.
For assets not carried at a revalued amount, the total impairment loss is recognised in the Income Statement.
2 8
S T A T E M E N T A C C O U N T I N G P O L I C I E S
1.10 Goods and Services Tax
All items in the financial statements are exclusive of Goods and Services Tax (GST) with the exception of receivables and payables
which are stated with the GST included. Where GST is not recoverable as an input tax then it is recognised as part of the related asset
or expense.
The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or
payables in the Balance Sheet.
The net GST paid to or received from the IRD, including the GST relating to investing and financing activities, is classified as an operating
cash flow in the Statement of Cash Flows.
Commitments and Contingencies are disclosed exclusive of GST.
1.11 Income Tax
The income tax expense for the period is the tax payable on the current period’s taxable income based on the income tax rate and
adjusted by changes in Deferred Tax Assets and Liabilities attributable to temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements and for unused tax losses (if any).
Deferred Tax Assets and Liabilities are recognised for temporary differences at the rate expected to apply when the assets are recovered
or liabilities are settled. The tax rate is applied to the cumulative amounts of deductible and taxable temporary differences to measure
the Deferred Tax Asset or Liability.
Deferred Tax Assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Deferred tax is charged or credited to the Income Statement, except where it relates to items charged or credited directly to equity, in
which case the tax is dealt within equity.
1.12 Borrowings
Borrowings are initially recognised at their fair value. After initial recognition, all borrowings are measured at amortised cost using the
effective interest method where this differs from face value.
1.13 Derivative Financial Instruments
Port Nelson uses derivative financial instruments such as interest rate swaps to hedge against interest rate fluctuations. Port Nelson
does not hold or issue derivative financial instruments for trading purposes. Such derivative financial instruments are stated at fair
value. The fair value of interest rate swaps is determined by reference to market values. The effective portion of changes in the fair
value of the derivative financial instruments that are designated and qualify as cash flow hedges are deferred in equity.
If a hedging instrument is sold, terminated, revoked or no longer meets the criteria for hedge accounting, the cumulative gain or loss
that remains recognised directly in equity from the period when the hedge was effective will be recognised in the Income Statement.
1.14 Financing Costs
Finance costs are recognised as an expense when incurred. Financing costs directly attributable to buildings under construction are
capitalised as part of the cost of those assets.
1.15 Employee Entitlements
Provision is made in respect of the company’s liability for annual leave, long service leave and retirement gratuities. Annual leave and
long service leave has been calculated on an actual entitlement basis at current rates of pay and retirement gratuities calculated at
current rates of pay assuming the payment will be made upon retirement.
1.16 Foreign Exchange Transactions
Transactions in foreign currencies are converted at the New Zealand rate of exchange ruling at the date of the transaction. Capital items
are converted at the exchange rate ruling at balance date or the forward exchange contract rate where applicable.
1.17 Leases
Leases of plant and equipment are classified as operating leases. Operating lease payments are charged as an expense in the period
in which they are incurred, as this represents the pattern of benefits derived from the leased assets.
1.18 Dividends
Provision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at balance
date.
1.19 Critical Judgements
Management have not had to exercise any critical judgements in the period ending 30 June 2007.
C H A N G E S I N A C C O U N T I N G P O L I C I E S
There have been no changes in accounting policies during the financial year.
2 9
N O T E S T O T H E A C C O U N T S
N O T E 1 : R E V E N U E
2007 2006Includes the following revenue: $000 $000
P O R T O P E R A T I O N S
Port Operations 27,702 25,269
Interest 107 67
Gain on Sale of Assets 55 28
Total Port Operations 27,864 25,364
P R O P E R T Y
Non Investment Property 3,542 3,399
Investment Property 895 791
Fair Value Adjustment to Investment Property 722 712
Total Property 5,159 4,902
T O T A L R E V E N U E 33,023 30,266
All revenue relates to continuing operations.
N O T E 2 : N E T S U R P L U S B E F O R E T A X A T I O N
2007 2006Includes the following expense: $000 $000
Administration Related 2,439 2,100
Audit Fees – IFRS Restatement 21 -
Audit Fees – Non IFRS 54 51
Bad Debts Written Off 112 2
Depreciation and Amortisation 3,636 3,736
Directors Fees 159 136
Donations/Corporate Sponsorship 195 159
Employee Wages and Related Expenses 7,703 6,926
Interest 2,513 1,564
Impairment - 194
Investment Property Expenses 12 12
Loss on Sale of Assets 36 -
Operating Leases 20 19
Other Operating Expenses 6,380 5,338
T O T A L E X P E N S E 23,280 20,237
All expenses relate to continuing operations.
N O T E 3 : P R O V I S I O N F O R T A X A T I O N 2007 2006 $000 $000
Current Tax 3,277 3,284
Deferred Tax (143) (143)
Deferred Tax Relating to Changes in Tax Rates (116) -
T A X E X P E N S E 3,018 3,141
Profit from Continuing Operations 9,743 10,728
Tax at 33% 3,215 3,540
Non Deductible Expenses 57 67
Non Taxable Income (238) (466)
Adjustments to Prior Year Estimates 100 -
Deferred Tax Relating to Changes in Tax Rates (116) -
T A X E X P E N S E 3,018 3,141
3 0
N O T E S T O T H E A C C O U N T S
N O T E 4 : D E F E R R E D T A X ( A S S E T S ) A N D L I A B I L I T I E S
Employee Intangible PP&E Derivatives Entitlements Assets Total $000 $000 $000 $000 $000
Opening Balance 4,065 26 (339) 68 3,820
Charged to Profit and Loss (200) - 36 21 (143)
Charged to Equity (189) 400 - - 211
B A L A N C E A T 3 3 % 3,676 426 (303) 89 3,888
Tax rate Adjustment
Charged to Profit and Loss (114) - 6 (8) (116)
Charged to Equity (220) - - - (220)
C L O S I N G B A L A N C E 3,342 426 (297) 81 3,552
N O T E 5 : I N V E S T M E N T P R O P E R T Y
2007 2006 $000 $000
Opening Balance 13,983 13,271
Revaluations 722 712
Properties Intended for Sale (394) -
C L O S I N G B A L A N C E 14,311 13,983
Properties Intended for Sale
An Investment Property has been presented as Properties Intended for Sale following the Company entering into a Sale Agreement, on 7 June
2007, with settlement after Balance Date.
Basis of Valuation
Investment Property is stated at fair value. Fair value was determined as at 30 June 2007 being the market value of the lessor’s interests as at 30
June 2007, and is valued annually. Valuation was completed by Ian McKeage, independent Registered Valuer, FNZIV, FPINZ of TelferYoung.
N O T E 6 : E Q U I T Y
(a) Share Capital 2007 2006 $000 $000
Opening Balance 31,046 31,046
Redeemed During the Year (25,000) -
B A L A N C E A T 3 0 J U N E 6,046 31,046
At 30 June 2007 the company has 25,415,404 ordinary shares. (2006 31,046,035). During the 2007 financial year the company purchased and
cancelled 5,630,631 shares. All shares are fully paid and have no par value. All shares carry equal voting rights and the right to share in any surplus
on winding up of the company. None of the shares carry fixed dividend rights.
(b) Retained Earnings 2007 2006 $000 $000
Retained Earnings 29,035 26,749
Net Surplus 6,725 7,587
Dividends Paid (1,000) (2,600)
Transfer to Dividend Payable (2,900) (2,700)
R E T A I N E D E A R N I N G S A T 3 0 J U N E 31,860 29,035
3 1
N O T E S T O T H E A C C O U N T S
(c) Asset Revaluation Reserve (Land) 2007 2006 $000 $000
Opening Balance 61,853 61,853
Revaluation Movement 2,638 -
C L O S I N G B A L A N C E 64,491 61,853
(d) Asset Revaluation Reserve (Wharves)
Opening Balance 4,495 4,495
Deferred Tax Movement 184 -
C L O S I N G B A L A N C E 4,679 4,495
(e) Asset Revaluation Reserve (Buildings)
Opening Balance 1,924 1,924
Deferred Tax Movement 225 -
Revaluation Movement (484) -
C L O S I N G B A L A N C E 1,665 1,924
(f) Asset Revaluation Summary
Opening Balance 68,272 68,272
Deferred Tax Movement 409 -
Revaluation Movement 2,154 -
C L O S I N G B A L A N C E 70,835 68,272
(g) Proposed Dividend Reserve
Opening Balance - 2,400
Dividend Paid - (2,400)
C L O S I N G B A L A N C E - -
(h) Hedging Reserve
Opening Balance 52 (87)
Fair Value Movement 1,212 165
Deferred Tax Movement (400) (26)
C L O S I N G B A L A N C E 864 52
Revaluation Reserves
The Revaluation Reserves relate to the revaluation of land, wharves, buildings and investment properties.
Hedging Reserve
The Hedging Reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to
hedged transactions that have not yet occurred.
N O T E 7 : C A S H A N D D E P O S I T S 2007 2006 $000 $000
General Account 269 585
Call Account 1,901 1,899
T O T A L 2,170 2,484
N O T E 8 : A C C O U N T S R E C E I V A B L E 2007 2006 $000 $000
Trade Receivables 3,508 3,010
Related Party Receivables 10 1
T O T A L 3,518 3,011
Movements in the provision for impairment of receivables are as follows:
Opening Balance - -
Additional Provisions made during the Year 72 -
Receivables Written Off during Period - -
A T 3 0 J U N E 72 -
N O T E 9 : I N V E N T O R I E S 2007 2006 $000 $000
Opening balance 363 436
Purchases 365 57
Expensed (334) (130)
C L O S I N G B A L A N C E 394 363
No inventories are pledged as security for liabilities nor are any inventories subject to retention of title clauses.
N O T E 1 0 : T R A D E A N D O T H E R P A Y A B L E S 2007 2006 $000 $000
Accruals 561 498
GST Payable 181 241
Trade Payables 874 706
Related Party Payables 105 8
C L O S I N G B A L A N C E 1,721 1,453
N O T E 1 1 : P R O P E R T Y P L A N T A N D E Q U I P M E N T
Accumulated Accumulated Depreciation Current Depreciation and Current Current Year and Cost/ Impairment Carrying Year Current Year Depre- Cost/ Impairment Carrying Revaluation Charges Amount Additions/ Year Impairment ciation Revaluation Revaluation Charges Amount 30/06/06 30/06/06 30/06/06 Transfers Disposals Charges Charges Surplus 30/06/07 30/06/07 30/06/072 0 0 7 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Mobile Plant 17,405 (8,692) 8,713 678 (139) - (950) - 17,304 (9,002) 8,302
Floating Plant 5,338 (3,037) 2,301 0 - - (303) - 5,338 (3,340) 1,998
Wharves & Berths 18,620 (887) 17,733 0 (502) - (889) - 18,103 (1,761) 16,342
Wharves Leased 2,633 (167) 2,466 0 - - (167) - 2,633 (334) 2,299
Plant, Furniture & Fittings 8,044 (4,049) 3,995 1,111 (12) - (602) - 9,113 (4,621) 4,492
IT Equipment 1,492 (1,133) 359 51 - - (134) - 1,543 (1,267) 276
Hardstanding & Roadways 4,970 (755) 4,215 765 - - (118) - 5,736 (874) 4,862
Dredging 2,089 - 2,089 0 - - - - 2,089 - 2,089
Buildings 8,486 (240) 8,246 272 - - (166) (484) 8,273 (405) 7,868
Buildings Leased 2,625 (91) 2,534 419 - - (84) - 3,045 (176) 2,869
Land Reclamation 1,443 - 1,443 (1,443) - - - - - - -
Land 43,913 - 43,913 917 - - - 1,068 45,898 - 45,898
Land Leased 36,946 - 36,946 1,074 - - - 1,570 39,590 - 39,590
Work in Progress 674 - 674 401 - - - - 1,075 - 1,075
154,678 (19,051) 135,627 4,245 (653) - (3,413) 2,154 159,740 (21,780) 137,960
During the year the Company received title to the reclaimed land and revalued it in accordance with the Company’s Accounting Policies 2006.
3 2
N O T E S T O T H E A C C O U N T S
3 3
N O T E S T O T H E A C C O U N T S
Accumulated Accumulated Depreciation Current Depreciation and Current Current Year and Cost/ Impairment Carrying Year Current Year Depre- Cost/ Impairment Carrying Revaluation Charges Amount Additions/ Year Impairment ciation Revaluation Revaluation Charges Amount 30/06/05 30/06/05 30/06/05 Transfers Disposals Charges Charges Surplus 30/06/06 30/06/06 30/06/062 0 0 6 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Mobile Plant 17,605 (7,770) 9,835 70 (6) (194) (992) - 17,405 (8,692) 8,713
Floating Plant 4,978 (2,795) 2,183 417 (8) - (291) - 5,338 (3,037) 2,301
Wharves & Berths 15,849 - 15,849 2,765 - - (881) - 18,620 (887) 17,733
Wharves Leased 2,591 - 2,591 42 - - (167) - 2,633 (167) 2,466
Plant, Furniture & Fittings 7,806 (3,509) 4,297 275 - - (577) - 8,044 (4,049) 3,995
IT Equipment 1,356 (970) 386 136 - - (163) - 1,492 (1,133) 359
Hardstanding & Roadways 4,847 (648) 4,199 123 - - (107) - 4,970 (755) 4,215
Dredging 2,092 - 2,092 (3) - - - - 2,089 - 2,089
Buildings 7,218 - 7,218 1,238 - - (210) - 8,486 (240) 8,246
Buildings Leased 2,285 - 2,285 341 - - (92) - 2,625 (91) 2,534
Land Reclamation 1,443 - 1,443 - - - - - 1,443 - 1,443
Land 43,881 - 43,881 32 - - - - 43,913 - 43,913
Land Leased 36,439 - 36,439 507 - - - - 36,946 - 36,946
Work in Progress 2,340 - 2,340 (1,666) - - - - 674 - 674
150,730 (15,692) 135,038 4,277 (14) (194) (3,480) - 154,678 (19,051) 135,627
Note: All assets are held primarily for the operating of port facilities.
Wharves and Buildings were valued as at 1 July 2005. The financial effect of the revaluations was that depreciation charges for the financial year
were increased by $416,449.
N O T E 1 2 : I N T A N G I B L E A S S E T S
2 0 0 7 Accumulated Accumulated Amortisation Current Amortisation and Current Current Year and Impairment Carrying Year Current Year Amort- Impairment Carrying Cost Charges Amount Additions/ Year Impairment isation Cost Charges Amount 30/06/06 30/06/06 30/06/06 Transfers Disposals Charges Charges 30/06/07 30/06/07 30/06/07 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Software 1,951 (1,242) 709 258 - - (225) 2,209 (1,467) 742
1,951 (1,242) 709 258 - - (225) 2,209 (1,467) 742
2 0 0 6 Accumulated Accumulated Amortisation Current Amortisation and Current Current Year and Impairment Carrying Year Current Year Amort- Impairment Carrying Cost Charges Amount Additions/ Year Impairment isation Cost Charges Amount 30/06/05 30/06/05 30/06/05 Transfers Disposals Charges Charges 30/06/06 30/06/06 30/06/06 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Software 1,681 (986) 695 270 - - (256) 1,951 (1,242) 709
1,681 (986) 695 270 - - (256) 1,951 (1,242) 709
All Intangible Assets are externally generated.
3 4
N O T E S T O T H E A C C O U N T S
N O T E 1 3 : F I N A N C I A L I N S T R U M E N T S
Financial Risk Management Objectives
Port Nelson does not enter into or trade financial instruments, including derivative financial instruments for speculative purposes. Treasury
functions are governed by a Treasury Policy approved by the Board of Directors. Approved instruments include:
• Forward rate agreements • Interest rate swaps
• Options on a swap • Interest rate options
• Interest rate collars • Spot and forward foreign exchange
Fixed rate hedging parameters are as follows:
Term Minimum Fixed Rate Amount Maximum Fixed Rate Amount
Less than 1 year 0% 100%
1 year to 4 years 30% 70%
5 years to 10 years 0% 50%
Maximum Credit Risk Exposure
Port Nelson is exposed to credit risk from the possibility of counter parties failing to perform their obligations.
Credit risk exposure on financial assets other than cash at bank and at call has been recognised in the balance sheet net of any provision for
doubtful debts. Principally any risk is in respect of cash and bank, and accounts receivable.
The major components of debtor exposure are to shipping companies and forestry exporters. Terms of trade are either payment on the 20th of
the month following or 7 working days. The majority of debtors are major international companies with extensive histories of payment. There
are no major concentrations of credit risk with respect to accounts receivable and any single debtor.
Maximum exposures to credit risk at balance date are: 2007 2006 $000 $000
Bank 269 585
Short Term Deposits @ 7.25% 1,901 1,899
Receivables 3,518 3,011
The above maximum exposures are net of any recognised provision for losses on these financial instruments. No collateral is held on the above accounts.
The Directors do not consider there is any significant exposure to interest rate risk on its investments.
Interest Rate Risk
Under interest rate swap contracts, Port Nelson agrees to exchange the difference between fixed and floating rate interest amounts calculated
on agreed, notional principal amounts thus allowing Port Nelson to mitigate the risk of changing interest rates on debt held.
Swaps expiring within 12 months are treated as core debt and will be replaced with another approved instrument.
The following table details the notional principle amounts and remaining terms of interest rate swap contracts outstanding as at reporting date.
Notional Amount Fair Value Interest 0 to 1 1 to 2 2 to 3 3 to 4 9 to 10
($000’s) gain/(loss) rate %* year years years years years
2 0 0 7 ( A T B A L A N C E D A T E )
$12,000 Swap 96 7.49 12,000 - - - -
$3,000 Swap 70 6.98 - 3,000 - - -
$4,000 Swap 178 6.75 - - - 4,000 -
$5,000 Swap 256 6.55 - - - 5,000 -
$3,000 Swap 367 6.49 - - - - 3,000
$27,000 967 - 12,000 3,000 - 9,000 3,000
2 0 0 7 ( P O S T B A L A N C E D A T E )
$7,000 Swap 17 7.91 - 7,000 - - -
$9,000 Swap 306 6.19 - - - - 9,000
$16,000 323 - - 7,000 - - 9,000
2 0 0 7 T O T A L 1,290 - 12,000 10,000 - 9,000 12,000
2 0 0 6 T O T A L 78 - 6,000 - - 4,000 5,000
*Interest rate is exclusive of margin and line of credit fee.
3 5
N O T E S T O T H E A C C O U N T S
All interest rate options and interest swap options are on 90 day roll-over terms.
The following table summarises the Port Nelson exposure to interest rate risk as at 30 June 2007.
2 0 0 7 (000’s) Weighted Fixed Maturity Dates Average NonFinancial Effective Floating 0 to 1 1 to 2 3 to 4 9 to 10 Interest Instruments Interest Rate Interest Year Years Years Years Bearing Total
A S S E T S
Cash 7.94 % 2,170 - - - - - 2,170
Receivables - - - - - - 3,518 3,518
T O T A L - 2,170 - - - - 3,518 5,688
L I A B I L I T I E S
Borrowings 7.87 % 15,000 12,000 3,000 9,000 3,000 - 42,000
Payables - - - - - - 1,721 1,721
T O T A L - 15,000 12,000 3,000 9,000 3,000 1,721 43,721
2 0 0 6 (000’s) Weighted Fixed Maturity Dates Average NonFinancial Effective Floating 0 to 1 1 to 2 3 to 4 9 to 10 Interest Instruments Interest Rate Interest Year Years Years Years Bearing Total
A S S E T S
Cash 7.0 % 2,484 - - - - - 2,484
Receivables - - - - - - 3,011 3,011
T O T A L - 2,484 - - - - 3,011 5,495
L I A B I L I T I E S
Borrowings 7.37 % 4,000 6,000 - - 4,000 5,000 - 19,000
Payables - - - - - - 1,453 1,453
T O T A L - 4,000 6,000 - - 4,000 5,000 1,453 20,453
Fair Values
Cash at bank and at call are valued as the amount of the deposit or the purchase of the underlying security.
Receivables are carried at the nominal amount due, less any provision for doubtful debts which represents the assessed credit risk.
Liability to trade creditors is recognised on receipt of goods and services at nominal value. Payment would normally occur within 30 days.
The following table details the fair value comparison of the long term borrowings as at 30 June 2007.
Carrying Value Fair Value 2007 2006 2007 2006 $000 $000 $000 $000F I N A N C I A L L I A B I L I T I E S
Term Debt 42,000 19,000 42,000 19,000
Fair Value Movement (1,290) (129)
T O T A L F I N A N C I A L L I A B I L I T I E S 42,000 19,000 40,710 18,871
Currency Risk
Port Nelson has no currency risk. (2006 Port Nelson had no currency risk).
N O T E 1 4 : T E R M L O A N
The Company has financing arrangements with Westpac Banking Corporation. The total facility is $57,000,000 for a term of 5 years. (2006:
$31,000,000 for a term of 5 years)
Security for the multi option credit facility is by a first and exclusive debenture charge over the assets and undertakings of the Company.
3 6
N O T E S T O T H E A C C O U N T S
N O T E 1 4 : T E R M L O A N ( . . . c o n t i n u e d )
Interest Rate Contracts:
The notional principal amounts of interest rate contracts outstanding at 30 June are as follows:
1. $12,000,000 for 1 year @ 7.49% p.a. terminating 30 May 2008.
2. $3,000,000 for 2 years @ 6.98% p.a. terminating 29 May 2009.
3. $4,000,000 for 4 years @ 6.75% p.a. terminating 31 May 2011.
4. $5,000,000 for 4 years @ 6.55% p.a. terminating 31 May 2011.
5. $3,000,000 for 9 years @ 6.49% p.a. terminating 30 November 2016.
6. $15,000,000 at floating interest rate.
Swaps expiring within 12 months are treated as core debt and will be replaced with another approved instrument.
N O T E 1 5 : C O M M I T M E N T S
The following expenditure was contracted for at balance date but not provided for:
2007 2006 $000 $000
Capital Development 197 238
N O T E 1 6 : O P E R A T I N G L E A S E S
Non-cancellable operating leases as lessee
2007 2006 $000 $000
Not later than one year 3 -
Later than one year and not later than five years 46 49
T O T A L N O N - C A N C E L L A B L E O P E R A T I N G L E A S E S 49 49
N O T E 1 7 : E M P L O Y E E B E N E F I T L I A B I L I T I E S
2007 2006 $000 $000
Accrued Pay 282 421
Annual Leave 593 581
Long Service Leave 88 89
Retirement Gratuities 125 113
Other Benefits 205 48
T O T A L E M P L O Y E E B E N E F I T L I A B I L I T I E S 1,293 1,252
Comprising:
Current 1,103 1,050
Non-current 190 202
T O T A L E M P L O Y E E B E N E F I T L I A B I L I T I E S 1,293 1,252
N O T E 1 8 : C O N T I N G E N T A S S E T S & L I A B I L I T I E S
2007
The Noise Variation has been notified by the Nelson City Council with effect. Over the next 6 months it is expected that remedial noise mitigation
work will be required.
2006
There may be a potential liability in the future with respect to noise mitigation costs of residential housing to comply with the proposed noise
variation (yet to be notified) to the Nelson City Council Resource Management Plan. Given the status of current hearings it is not possible to
reliably estimate the liability.
3 7
N O T E S T O T H E A C C O U N T S
N O T E 1 9 : R E L A T E D P A R T Y D I S C L O S U R E 2007 2006 $000 $000Nelson City Council
Services Provided by Port Nelson 41 13
Services Provided to Port Nelson 485 266
Accounts Payable by Port Nelson 104 1
Accounts Receivable by Port Nelson 10 1
*Dividends Paid by Port Nelson 1,850 2,500
Share Buy Back by Port Nelson 12,500 -
Tasman District Council
*Dividends paid by Port Nelson 1,850 2,500
Share buy back by Port Nelson 12,500 -
Nelmac
Services Provided to Port Nelson 21 18
Accounts Payable by Port Nelson 1 -
* Net of imputation credits
Nelmac
Nelmac is 100% owned by Nelson City Council and is therefore a related party.
All Related Parties
There were no nil or nominal value transactions between the Company and related parties (2006 nil).
No inter entity debt has been forgiven or written off (2006 nil).
Directors
Mr A O Patterson is a Director of Cold Storage Nelson Ltd that leases land from the Company. The amount received from Cold Storage Nelson Ltd
was $408,745 for the year, and $NIL was receivable at year end (2006 $315,304). The amount paid to Cold Storage Nelson Ltd was $1,871 for the
year, and $NIL was payable at year end (2006 $99).
Mr P M Schuyt is a Director of ECN Ltd from which the Company purchased EDI services. Payments for the year to 30 June totalled $5,067.
(2006 $4,458) The Company owed $400 as at 30 June (2006 $210). Mr P M Schuyt is a Director of Express Couriers Ltd from which the Company
purchased courier services. Payments for the year to 30 June totalled $1,503 (2006 $1,738). The Company owed $71 as at 30 June (2006 $127).
Mr P M Schuyt is also an employee of New Zealand Post Ltd. The amount paid to New Zealand Post Ltd was $6,722 for the year, and $425 was
payable at year end.
Key Management Personnel
Details of compensation paid to key management personnel during the financial year:
2007 2006 $000 $000
Total remuneration to Key Management Personnel 1,136 1,283
Termination Benefits - 61
T O T A L 1,136 1,344
N O T E 2 0 : F I N A N C I A L R E P O R T I N G B Y S E G M E N T S
Port Nelson operates in one industry and one geographical segment providing and managing port facilities, marine services, cargo handling
operations, and investment properties at the port of Nelson.
3 8
N O T E S T O T H E A C C O U N T S
N O T E 2 1 : I M P U T A T I O N C R E D I T S
Imputation Credits Available to Shareholders: 2007 2006 $000 $000
Opening Balance 9,338 8,491
Tax Paid 3,176 3,310
Credits Attached to Dividends Paid (1,822) (2,463)
C L O S I N G B A L A N C E 10,692 9,338
N O T E 2 2 : E V E N T S O C C U R R I N G A F T E R B A L A N C E D A T E
Subsequent to balance date Port Nelson entered into an agreement to purchase a number of properties and divest a number of other properties
with a single counterparty. This transaction resulted in the company obtaining freehold title to a number of strategic properties while divesting
a number of non strategic properties. Settlement was 31 July 2007.
The net effect of this transaction was that Port Nelson acquired an additional $2,887,000 of non current assets.
N O T E 2 3 : R E C O N C I L I A T I O N B E T W E E N N Z I F R S A N D N Z G A A P A S A T 3 0 J U N E 2 0 0 6
Effect of Previous transition to NZGAAP NZIFRS NZIFRS Notes $000 $000 $000
C U R R E N T A S S E T S
Cash and Cash Equivalents 2,484 - 2,484
Receivables 3,011 - 3,011
Inventory 363 - 363
Prepayments 343 - 343
Tax Refund 32 - 32
Hedging Assets a - 78 78
6,233 78 6,311
L E S S C U R R E N T L I A B I L I T I E S
Bank
Accounts Payable 1,453 - 1,453
Employee Entitlements 1,050 - 1,050
Provision for Dividend 2,700 - 2,700
Hedging Liability - - -
5,203 - 5,203
W O R K I N G C A P I T A L 1,030 78 1,108
N O N C U R R E N T A S S E T S
Property, Plant and Equipment b 136,336 (709) 135,627
Investment Property 13,983 - 13,983
Intangible Assets b - 709 709
150,319 - 150,319N O N C U R R E N T L I A B I L I T I E S
Employee Entitlements 202 - 202
Deferred Tax Liability c 3,663 157 3,820
Term Loan 19,000 - 19,000
22,865 157 23,022
T O T A L N E T A S S E T S 128,484 (79) 128,405
E Q U I T Y
Issued Capital 31,046 - 31,046
Retained Earnings d 18,469 10,566 29,035
Proposed Dividend Reserve - - -
Asset Revaluation Reserve e 78,969 (10,697) 68,272
Hedging Reserve a - 52 52
T O T A L E Q U I T Y 128,484 (79) 128,405
3 9
N O T E S T O T H E A C C O U N T S
N o t e s t o t h e R e c o n c i l i a t i o n s 3 0 J u n e 2 0 0 6
(a) Hedging Liability
Port Nelson qualifies for treatment of its financial derivatives as Cash Flow Hedges per NZ IAS 39. At 30 June 2006 Port Nelson had a $78,000
Hedging Asset.
Effect of movement: Effect of Previous transition to NZGAAP NZIFRS NZIFRS $000 $000 $000
Hedging Asset - 78 78
Deferred Tax Liability - (26) (26)
Hedging Reserve - 52 52
(b) Intangibles
The effect of the reclassifications as at 30 June 2006 are as below. Effect of transition to Previous NZIFRS NZGAAP Reclassification NZIFRS30 June 2006 $000 $000 $000
I N T A N G I B L E S 709 (709) -
Software (Intangibles) 709 (709) -
Intangibles in the nature of software amounting to $709,000 have been reclassified as Intangibles.
(c) Deferred Tax Liability $000
Opening 3,663
Reversal of existing NZ GAAP (3,663)
3 0 J U N E 2 0 0 6 N Z I F R S L I A B I L I T Y 3,820
Consisting of:
Deferred Tax Asset (805)
Deferred Tax Liability 4,625
3 0 J U N E 2 0 0 6 N Z I F R S L I A B I L I T Y 3,820
At 30 June 2006 a temporary difference of $12,602,000 existed between the total tax base value of depreciable assets and the total carrying value of the same assets. A Deferred Tax Liability of $4,625,000 in relation to the temporary difference between the value of the asset bases was established requiring an increase to the Deferred Tax Liability. Against the increase in Deferred Tax Liability, a Deferred Tax Asset of $466,000 relating to the temporary differences between tax base value of depreciable assets and the carrying value of those assets and $339,000 relating to the Employee was netted. The Deferred Tax asset of $805,000 has been netted against the Deferred Tax Liability as per NZIAS 12 (74).
(d) Retained Earnings
30 June 2006 $000
NZ GAAP 18,469
Investment Property revaluation 1/7/05 5,469
Transfer of balance previously attributable to Investment Property from Revaluation Reserve 5,763
Transfer from Revaluation Reserve of debit balances relating to individual assets previously netted off on a class basis (1,109)
Reversal of existing NZ GAAP Deferred Tax Liability balance at Transition 1,259
Deferred Tax Liability adjustment on differing tax bases as at 1 July 2005 excluding revaluations (1,319)
Reversal of Investment Property revaluation at 30 June 2006 previously transferred to Revaluation Reserve 712
NZ IFRS transition adjusting entry (209)
3 0 J U N E 2 0 0 6 N Z I F R S R E T A I N E D E A R N I N G S 29,035
4 0
N O T E S T O T H E A C C O U N T S
N O T E 2 3 : R E C O N C I L I A T I O N B E T W E E N N Z I F R S A N D N Z G A A P A S A T 3 0 J U N E 2 0 0 6 ( . . . c o n t )
(e) Asset Revaluation Reserve Effect of transition Effect of transition Previous to NZIFRS to NZIFRS NZGAAP Reclassification Adjusting Entry NZIFRS30 June 2006 $000 $000 $000 $000
A S S E T R E V A L U A T I O N R E S E R V E 78,969 (12,015) 1,318 68,272
Consisting of: Buildings 1,144 - 780 1,924
Land 61,853 - - 61,853
Investment Property 11,944 (11,944) - -
Wharves 4,028 (71) 538 4,495
The revaluation components associated with Investment Property are more appropriately allocated to Retained Earnings as per NZIAS 40 (35).
$000
Opening 78,969
Transfer from Retained Earnings of credit balances relating to individual assets previously netted-off on a class basis 1,108
Transfer of accumulated revaluation increments for Investment Property (11,944)
Reversal of existing NZ GAAP Deferred Tax Liability balance at Transition 329
Reversal of existing NZ GAAP Deferred Tax Liability movement in 2006 year 2,217
Deferred Tax Liability adjustment on depreciable revaluations on 1 July 2005 (2,616)
IFRS transition adjusting entry 209
C L O S I N G 68,272
N O T E 2 4 : E X P L A N A T I O N O F T R A N S I T I O N T O N E W Z E A L A N D E Q U I V A L E N T S T O I F R S
A S A T T H E D A T E O F T R A N S I T I O N T O N Z I F R S : 1 J U L Y 2 0 0 5
Previous Effect of transition NZGAAP to NZIFRS NZIFRS Notes $000 $000 $000C U R R E N T A S S E T S
Cash and Cash Equivalents - - -
Trade and Other Receivables 3,666 - 3,666
Inventories 436 - 436
Prepayments 131 - 131
Tax Refund 6 - 6
4,239 - 4,239L E S S C U R R E N T L I A B I L I T I E S
Bank 17 - 17
Trade and Other Payables 1,682 - 1,682
Employee Entitlements 961 - 961
Hedging Liability a 129 129
2,660 129 2,789
W O R K I N G C A P I T A L 1,579 (129) 1,450
N O N C U R R E N T A S S E T S
Property, Plant and Equipment b 117,189 18,958 136,147
Investment Property - 13,271 13,271
Intangible Assets b - 695 695
117,189 32,924 150,113
N O N C U R R E N T L I A B I L I T I E S
Employee Entitlements 289 - 289
Deferred Tax Liability c 1,588 2,306 3,894
Term Loan 19,000 - 19,000
20,877 2,306 23,183
T O T A L N E T A S S E T S 97,891 30,489 128,380
E Q U I T Y
Issued Capital 31,046 - 31,046
Retained Earnings d 16,894 9,855 26,749
Proposed Dividend Reserve 2,400 - 2,400
Asset Revaluation Reserve e 47,551 20,721 68,272
Hedging Reserve a - (87) (87)
T O T A L E Q U I T Y 97,891 30,489 128,380
4 1
N O T E S T O T H E A C C O U N T S
N o t e s t o t h e R e c o n c i l i a t i o n s 1 J u l y 2 0 0 5
(a) Hedging Liability
Port Nelson qualifies for treatment of its financial derivatives as Cash Flow Hedges per NZ IAS 39. On transition Port Nelson had a $129,000
hedging liability.
Effect of movement: Previous Effect of Transition NZGAAP to NZIFRS NZIFRS $000 $000 $000
Deferred Tax (Asset) - (42) (42)
Hedging Liability - 129 129
Hedging Reserve - (87) (87)
(b) Revaluations
On transition, a number of reclassifications where made to Property Plant and Equipment in addition to Port Nelson revaluing its Land, Wharves
and Buildings. Previously Buildings were not revalued. The revaluation of Buildings is a policy change associated with the transition to IFRS.
Effect of Transition Effect of Transition Previous to NZIFRS to NZIFRS NZGAAP Reclassification Revaluation NZIFRS1 July 2005 $000 $000 $000 $000
P R O P E R T Y , P L A N T A N D E Q U I P M E N T 117,189 32,924 150,113
Consisting of:
Mobile Plant 9,835 - - 9,835
Floating Plant 2,183 - - 2,183
Wharves Leased 2,288 - 302 2,591
Wharves 11,467 - 4,712 16,178
Plant, Furniture and Fittings 4,296 - - 4,296
Information Technology 1,080 (695) - 385
Software (Intangibles) - 695 - 695
Hard standing and Roadways 4,198 - - 4,199
Dredging 2,093 - - 2,093
Buildings 6,336 - 1,297 7,632
Buildings Leased 2,240 - 410 2,651
Land at Cost – Reclamation 1,443 - - 1,443
Land (Revalued) 33,532 (298) 10,646 43,881
Land (Revalued) Leased 33,857 (7,504) 10,086 36,439
Investment Property - 7,802 5,469 13,271
Work in Progress 2,341 - - 2,341
Port Nelson has elected to use the revalued amounts at Transition as fair value. Land will continue to be revalued every three years and Wharves
and Buildings at five year intervals or earlier if there has been a material change in value of the assets.
Intangibles in the nature of software amounting to $695,000 at Transition have been identified. Investment Property has been classified and
revalued at Transition. The amount relating to Investment Property under previous NZ GAAP was $7,802,000 recognised on transition and
subsequently revalued.
On Transition a review was undertaken of the categorisation of all Port Nelson assets with reclassification adjustments made where deemed
appropriate between the other categories.
4 2
N O T E S T O T H E A C C O U N T S
N O T E 2 4 : E X P L A N A T I O N O F T R A N S I T I O N T O N E W Z E A L A N D E Q U I V A L E N T S T O I F R S
A S A T T H E D A T E O F T R A N S I T I O N T O N Z I F R S : 1 J U L Y 2 0 0 5 ( . . . c o n t i n u e d )
(c) Deferred Tax Liability $000
Opening 1,558
Reversal of Existing NZ GAAP (1,558)
1 J U L Y 2 0 0 5 N Z I F R S L I A B I L I T Y 3,894
Consisting of:
Deferred Tax Asset (640)
Deferred Tax Liability 4,534
1 J U L Y 2 0 0 5 N Z I F R S L I A B I L I T Y 3,894
At Transition a temporary difference of $12,893,000 existed between the total tax base value of depreciable assets and the total carrying value
of the same assets. A Deferred Tax Liability of $4,534,000 in relation to the temporary difference between the value of the asset bases was
established requiring an increase to the Deferred Tax Liability. Against the increase in Deferred Tax Liability, a Deferred Tax Asset of $279,000
relating to the temporary differences between tax base value of depreciable assets and the carrying value of those assets, $318,000 relating to
the Employee Entitlements and $43,000 relating to the Hedging Liability was netted. The Deferred Tax asset of $640,000 has been netted against
the Deferred Tax Liability as per NZIAS 12 (74).
(d) Retained Earnings $000
Opening 16,894
Investment Property revaluation 1/7/05 5,469
Transfer of balance previously attributable to Investment Property from Revaluation Reserve 5,763
Transfer from Revaluation Reserve of debit balances relating to individual assets previously netted off on a class basis (1,108)
Reversal of existing NZ GAAP Deferred Tax Liability balance at Transition 1,259
Deferred Tax Liability adjustment on differing tax bases as at 1 July 2005 excluding revaluations in (e) (1,319)
IFRS transition adjusting entry (209)
C L O S I N G 26,749
The Deferred Tax Liability balance at Transition ($1,588,000) relating to Retained Earnings amounting to $1,259,000 has been adjusted against
Retained Earnings within the Deferred Tax Liability Adjustment.
(e) Asset Revaluation Reserve $000
Opening 47,551
Revaluation of PPE 27,455
Transfer from Retained earnings of credit balances relating to individual assets previously netted-off on a class basis 1,108
Transfer of accumulated revaluation increments for Investment Property (5,763)
Reversal of existing NZ GAAP Deferred Tax Liability balance at Transition 329
Deferred Tax Liability adjustment on depreciable revaluations on 1 July 2005 (2,616)
IFRS transition adjusting entry 209
C L O S I N G 68,272
The total revaluation increase of $32,924,000 consisted of $28,562,000 relating to PP&E and $5,469,000 relating to Investment Property. The
revaluation increment required an adjustment to reflect the Deferred Tax Liability effect on the depreciable assets revalued at 1 July 2005. The
adjustments resulted in a net $20,721,000 increase to the Revaluation Reserve account.
4 2
Registered Office 10 Low Street, Port Nelson
PO Box 844, Nelson 7040
New Zealand
Tel. (03) 548 2099
Fax. (03) 546 9015
www.portnelson.co.nz
Auditors Audit New Zealand, on behalf of the
Office of the Auditor General
Solicitors Pitt & Moore
Barristers & Solicitors
PO Box 42
Nelson 7040
J.A. Levenbach
Barrister & Solicitor
PO Box 35
Nelson 7040
Simpson Grierson
Barristers & Solicitors
PO Box 2402
Wellington 6140
Bankers Westpac Banking Corporation
PO Box 643
Nelson 7040
4 3
Board of DirectorsA.O. Patterson Chairman
T.B. King
P.V. Lough Deputy Chairman and
Chairman Remuneration Committee
P.K. Matheson
B. Monopoli
P.M. Schuyt Chairman Finance and Risk Committee
SecretaryP.J. Pittar
Executive OfficersM.J. Byrne Chief Executive Officer
K.M. Barnett Human Resources & Quality Manager
R.J. Carter Infrastructure Manager
P.N. Francois Cargo Operations Manager
P.J. Pittar Chief Commercial Officer
C.J. Shand Tasman Bay Stevedoring Manager
R.J. Skucek Maritime Operations Manager
C.E. Williams Marketing Manager
D I R E C T O R Y
Mission Statement
To operate the Company as a successful business providing cost
efficient, effective and competitive services and facilities for port
users and shippers.
To provide for the present and future needs of the Company in
ways that are sensitive to people, use resources wisely, and are in
harmony with the environment of an export port.