ANNUAL REPORT
FOR THE YEAR ENDED 31 MARCH 2020
Central Energy Trust awarded a grant to Te Aroha Noa Community Services to assist with establishing a health centre and installing heat pumps at the adjacent low-cost dental centre.
Po Box 1242, Palmerston North 4440 32 Amesbury Street, Palmerston North 4410 Ph (06) 358 4163 Fax (06) 356 5196 www.centralenergytrust.org.nz
CONTENTS
TRUSTEES 2 TRUST DIRECTORY 3 CHAIRPERSONS REPORT 4 THE YEAR IN REVIEW 7 BURSARIES 10 STATEMENT OF FINANCIAL PERFORMANCE 12 STATEMENT OF MOVEMENTS IN TRUST FUNDS 13 STATEMENT OF FINANCIAL POSITION 14 STATEMENT OF ACCOUNTING POLICIES 15 NOTES TO THE FINANCIAL STATEMENTS 17 AUDITOR’S REPORT 27
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 1 TRUSTEES FOR THE YEAR ENDED 31 MARCH 2020
Front row, from left to right: Murray Georgel, Ruma Karaitiana (Deputy Chairperson), Peter Askey (Chairperson), Rodney Wong and Margaret Kouvelis.
TRUSTEE ROLE APPOINTED
Peter Askey Chairperson 1 October 2012
Ruma Karaitiana Deputy Chairperson 1 October 2015
Rodney Wong Trustee 1 October 2012
Margaret Kouvelis Trustee 1 October 2018
Murray Georgel Trustee 1 October 2018
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 2 DIRECTORY FOR THE YEAR ENDED 31 MARCH 2020
ACCOUNTANTS / SECRETARY Billie Stanley BDO Central (NI) Ltd Palmerston North
BANKERS ANZ BANK Rangitikei Street Palmerston North
ASB Bank The Square Palmerston North
AUDITORS CKS Audit Chartered Accountants Palmerston North
SOLICITORS Wadham Partners Broadway Avenue Palmerston North
INVESTMENT ADVISORS Craigs Investment Partners Shortland Street Auckland
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 3 CHAIRPERSONS REPORT FOR THE YEAR ENDED 31 MARCH 2020
I am pleased to present the Central Energy Trust Annual Report for the 2019-2020 year. Although the year finished like no other in the Trusts history the community spirt displayed and initiatives undertaken during the year were encouraging.
The events that unfolded in the latter months of 2019 and into 2020 served to illustrate the importance of the strategies, policies and processes put in place by your current CET team and their predecessors. These efforts ensured that the Trust could be prepared as best it could be to react to the prevailing circumstances.
We have previously mentioned the wisdom and foresight of those who set up the trust. That this trust has been in a position to continue to provide grants during these times when others have not is yet further testimony to their efforts.
Implementation of the work and milestone items within the Trust’s strategic plan continued throughout the year. The Board met all the requirements set. It is pleasing to note that the website and interoperability project is on target to meet its completion date.
COMMUNITY INVESTMENT HIGHLIGHTS
The Trust continues to focus on its goal to support the community through allocations made each year to a wide range
of entities covering sporting, education, charitable and community organisations whose efforts will benefit the wider
community.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 4 CHAIRPERSONS REPORT - Continued FOR THE YEAR ENDED 31 MARCH 2020
In 2019 Palmerston North won a successful bid for the rights to host the Under 18 Men’s Softball World Cup. The Central Energy
Trust awarded a grant of $200,000 to the Manawatu Softball Association towards a flood lighting system for the softball
diamonds at Colquhoun Park. An additional $20,000 was also awarded towards the event costs of hosting the World Cup. The
event ran from 22 February to 1 March 2020. A significant number of friends, families and fans, complemented by world-
wide television coverage, supported the 12 teams from all over Under 18 Men’s Softball World Cup the world as they each competed for the world title. It was a credit
to all those involved to see the city come alive with all the visitors from out of town supporting the World Cup!
During the year the Trust awarded a grant of $4,500 towards the Kind Hearts Trust – Manawatu Region Schools Event. This event
was held on 14 August 2019 at Central Energy Trust Arena with 500+ pupils, 30+ teachers and parent supporters. The event is
about celebrating, sharing and planning kindness activities. Some of the Trustees were fortunate to attend this event and
were astounded by the engagement from schools across the Manawatu. The Trust has recently awarded $5,000 towards the
same event for 2020, which continues to increase the number of participating schools each year.
2015 2017 2018 2019
8 12 22 32 SCHOOLS SCHOOLS SCHOOLS SCHOOLS
Other major projects of note include grants awarded to the Bunnythorpe Community Centre Association to build a new community centre, Feilding Little Theatre Players Inc to upgrade their existing building and Massey University Foundation to restore the historic Refectory Building.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 5 CHAIRPERSONS REPORT - Continued FOR THE YEAR ENDED 31 MARCH 2020
Some recipients that received small grants and achieved significant outcomes included Feilding Old Boys Oroua Rugby & Netball Club to replace their refrigeration system, Pahiatua and District Museum to upgrade the museum wiring and Kimbolton Community Committee towards the connection for lighting of the artistic farm scene. The outcomes theses organisations achieve for our local communities does not go unnoticed and is appreciated by the Trustees who have the difficult task of allocating funds across the community.
The Trust received 114 applications for the 2020 year of which
grants of $2.5 million were awarded. 77% of grant applications
Kind Hearts Trust – were successful which is pleasing given the Trust continues to 2019 Manawatu Region Schools Event experience high volumes of applications. Application values significantly exceed the funds available for distribution and the
Trust inevitably finds itself in a situation where it is not always able to award the full amount applied for.
On behalf of the Trust I would like to congratulate our 16 Bursary recipients and wish them all the best for their studies.
My appreciation goes to Secretary Billie Stanley and her BDO
staff, Nigel Scott of Craigs Investment partners, Auditors CKS Audit and Solicitors Wadham Partners. I also thank my fellow
Trustees for their support and contributions. It is a pleasure to work with a dedicated team who come together to ensure the
Trust is in a strong position to meet the challenges of the future.
Finally, I would like to thank all grant recipients through whose
unselfish efforts and commitment convert the funds allocated into wider community benefits.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 6 THE YEAR IN REVIEW FOR THE YEAR ENDED 31 MARCH 2020
2020 GRANTS AT A GLANCE
SUCCESSFUL GRANT APPLICATIONS VALUE OF GRANTS AWARDED 77% $2,514,395
AVERAGE VALUE OF GRANTS TOTAL NUMBER OF GRANT AWARDED APPLICATIONS RECEIVED $28,698 114 Individual grant applications range from $1,179 - $250,000
PERCENTAGE OF FUNDING AWARDED BY CATEGORY
10% 7%
22% 61%
Community Facilities Sport Arts and Culture Community Wellbeing
The 2019-2020 financial year began where the previous year left off, accumulating portfolio gains as the year progressed before reaching an all-time market value peak in February 2020. However, the Covid-19 outbreak in March 2020 meant global markets moved rapidly from a serious threat to a full pandemic response driving negative returns as the world responded.
The financial response to Covid-19 saw the Trust recognise an overall decrease in investment value of $1.7 million at the close of the financial year, 2.5% of the total opening portfolio. The lions share of the decrease was attributable to unrealised losses as a result of the magnitude and speed of Governments and Central banks responding to Covid-19, this in turn created volatility in bond yields as the markets factored in increased credit risks and concern for corporate profitability within equity markets.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 7 THE YEAR IN REVIEW - Continued FOR THE YEAR ENDED 31 MARCH 2020
While the Trust investment value decreased, this is the first reduction in Trust Capital since 2012, eight years ago. Total Trust Funds as at 31 March 2020 were $68.8 million.
Trust Interest and dividend income for the financial year reduced by 6.1% down to $2.5 million, excluding foreign exchange. The ability to secure quality high yielding bonds for maturing investments in a low interest environment market, has and will continue to place downward pressure on Trust income. Expenditure for the year was $389 thousand, 5% lower than the previous year excluding foreign exchange. Lower expenditure for the 2019-2020 financial year is predominantly due to Trustee recruitment costs incurring in the prior year. The combined result is an operating surplus of $2.2 million.
Trustees awarded $2.5 million of grants and $75 thousand of bursaries to recipients, resulting in an after-tax deficit of $345 thousand. The overall decrease in investment value of $1.7 million resulted in a final Trust loss of just under $2.1 million dollars.
Total allocations made to bursary and grant recipients over the life of the Trust now total $50.1 million dollars. This is an allocation of funding that that exceeds over 72% of the value of total Trust Funds held.
TOTAL TRUST FUNDS OF TRUST CAPITAL AND ACCUMULATED INCOME, AFTER FUND ALLOCATIONS AND PORTFOLIO MOVEMENTS DECREASED TO $69 MILLION.
80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 $ Value $ 20,000,000 10,000,000 0 1994 2000 2005 2010 2015 2020 -10,000,000 Year
Accumulated Income Total Trust Funds Total Allocations Made
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 8 THE YEAR IN REVIEW - Continued FOR THE YEAR ENDED 31 MARCH 2020
THE OUTLOOK AHEAD
The year ahead globally, nationally, and locally presents unique challenges for the Trust, grant recipients and the community alike as the world navigates the economic climate being driven by Covid- 19. Although the Trust has robust strategic planning and long-term investment securities, the Trust will not be exempt from market disruptions. In the coming financial year there is an anticipation that Trust income will be characterised by lower returns; dividend receipts due to Covid-19’s impact on New Zealand and Global corporate profitability interest income due to a downward trending low interest economic environment.
During the year ahead our grant round will continue to operate in November and May with bursaries being allocated in February. The vulnerability of organisations that rely on community funding are likely to come under pressure making the task of allocating funding difficult. Striking a balance between the needs of all those seeking funding is a responsibility taken very seriously, Trustees take considerable time and effort to achieve the most equitable outcomes for all organisations in relation to the funds available.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 9 BURSARIES FOR THE YEAR ENDED 31 MARCH 2020
This Financial year sixteen students were awarded Academic and Vocational Scholarships. Bursars studying over the next three to four years are:
First name Last name Degree Olivia Brookie Bachelor of Chemical/Bioprocess Engineering Andrew Hearn Bachelor of Sport and Exercise Asaph Lasaca Bachelor of Engineering with Honours (Mechatranics) Bailee McConnell Bachelor of Accountancy Caleb Martin Bachelor of Business (Finance) Kaitlin Herron Bachelor of Aviation Chanda Sapkota Bachelor of Nursing Campbell Jackson Bachelor of Engineering Keegan Leask Bachelor of Science Max Zander Bachelor of Business (Finance) Thomas Kirk Bachelor of Veterinary Science Jessica Schnell Bachelor of Business (Marketing) Thomas Sun Bachelor of Food Technology with Honours Rebecca Evans Bachelor of Business majoring in Accounting Isabelle O'Connor Bachelor of Agricultural Science Jack Pinder Bachelor of Veterinary Science
2020 CENTRAL ENERGY TRUST BURSARY RECIPIENTS
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 10 BURSARIES - Continued FOR THE YEAR ENDED 31 MARCH 2020
For the third year running the Trust had on offer the Central Energy Trust Supreme Award being recognition of an outstanding applicant. The supreme award totals $15,000, $5,000 per annum over a period of 3 years.
For the 2020 year the Trustees awarded the Supreme Award to Olivia Brookie. Olivia was a pivotal leader in her school, Cornerstone Christian School. She is academically outstanding as well as a significant cultural and sporting achiever. A multi-talented individual she is a New Zealand ranked fencer in sabre and is now studying towards a Bachelor of Chemical/Bioprocess Engineering.
OLIVIA BROOKIE
2020 BURSARY PRESENTATION EVENING
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 11 STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2020
Note 2020 2019 $ $ Income Dividends 1,015,656 1,094,372 Interest 1,506,205 1,591,377 Foreign exchange gain 66,744 - 2,588,605 2,685,749 Expenses Accounting and administration 92,404 92,466 Advertising 6,384 8,770 Audit fees 6,200 6,100 Bank charges and fees 446 402 Bursary and AGM expenses 4,938 4,303 Consultants fees (internal) 6,540 5,021 Digital enhancement 2,714 680 Foreign exchange loss - 47,754 General Expenses 1,144 - Insurance (Trustees) 4,650 4,447 Portfolio management 128,993 125,258 Printing, stationery, and tolls 5,495 5,040 Secretarial fees 33,955 31,584 Trustee recruitment - 18,334 Trustees expenses 461 2,233 Trustees fees 60,250 68,250 Website expenses 530 530 GST on expenses 33,723 35,850 388,826 457,022 Operating surplus before distributions 2,199,779 2,228,727
Allocations Bursaries and scholarships paid (74,500) (67,000) Grants approved during the year 1 (2,514,395) (2,457,444) Grant adjustments 1 73,564 31,352 Total allocations to beneficiaries (2,515,331) (2,493,092) Income surplus (loss) before tax (315,552) (264,365)
Taxation for the year 4 (29,036) (47,485) Income surplus (loss) after tax (344,588) (311,850)
Investment portfolio movements
Realised profit on disposal of investments 3 1,289,704 1,065,087 Realised loss on disposal of investments 3 (1,352,270) (827,162) Unrealised changes in investment values 3 (1,639,857) 4,675,833 Total investment portfolio movements (1,702,423) 4,913,758
Trust surplus (loss) after tax and ($2,047,011) $4,601,908 provision for grants
This statement is to be read in conjunction with the statement of accounting policies, notes to the financial statements and the audit report.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 12 STATEMENT OF MOVEMENT IN TRUST FUNDS FOR THE YEAR ENDED 31 MARCH 2020
Note 2020 2019 $ $
Trust funds at beginning of year 70,823,213 66,221,305 Net surplus (loss) for the year after tax (2,047,011) 4,601,908 and provision for Grants Tax charge on behalf of beneficiaries 4 (16,089) -
Trust funds at end of year 5 $68,760,113 $70,823,213
Represented by:
Trust capital brought forward 64,121,975 59,208,217 Total investment portfolio movements (1,702,423) 4,913,758
Trust capital at end of the year $62,419,552 $64,121,975
Accumulated income reserve brought forward 6,701,238 7,013,088
Operating surplus 2,199,779 2,228,727 Less: Total allocations to beneficiaries (2,515,331) (2,493,094)
(315,552) (264,365)
Tax charge for the year (29,036) (47,485)
Tax charge on behalf of beneficiaries (16,089) - Accumulated income reserve $6,340,561 $6,701,238 at end of year
This statement is to be read in conjunction with the statement of accounting policies, notes to the financial statements and the audit report.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 13 STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2020
Note 2020 2019 $ $
Trust capital 62,419,552 64,121,975 Accumulated income reserve 6,340,561 6,701,238 Trust Funds 5 $68,760,113 $70,823,213
Represented by:
Current Assets Cash at bank 2 4,469,254 4,562,945 Term deposits 1,361,798 1,321,335 Accrued interest 275,545 264,624 Taxation receivable 4 55 24 6,106,652 6,148,928 Non-current Assets Shares and securities 3 65,521,701 66,985,610
Total Assets 71,628,353 73,134,538
Current liabilities Accounts payable 97,346 54,978 Grants approved not paid 1 2,770,894 2,256,347 Total Liabilities 2,868,240 2,311,325
Total Net Assets $68,760,113 $70,823,213
P T Askey Dated: Chair
K M Karaitiana Deputy Chair
This statement is to be read in conjunction with the statement of accounting policies, notes to the financial statements and the audit report.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 14 STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2020
(A) BASIS OF PREPARATION
Central Power Electricity Trust was established on 20 July 1993 by a Trust Deed pursuant to the Energy Companies Act 1992. On 17 February 2003 the Trustees passed a unanimous resolution to change the name of the Trust to Central Energy Trust.
The financial statements are presented in New Zealand Dollars ($) which is the Trusts functional currency. The financial statements comprise statements of the following: accounting policies; financial performance; movements in equity; financial position; as well as notes to these statements.
The financial statements are special purpose financial statements and have been prepared for the reporting requirements of the Trustees and Beneficiaries of Central Energy Trust only in accordance with the following accounting policies.
The financial statements have been prepared on the basis of historical cost except investments which are stated at valuation.
(B) INVESTMENTS
Current investments are stated at quoted market value. Unrealised gains and losses arising from changes in market value are recognised in the statement of financial performance.
(C) TAXATION
Taxation expense recognised for the year is calculated using the taxes payables method and is determined using tax rules. Under the taxes payable method taxation expense is equal to the estimated income tax payable for the year, adjusted for any differences between the estimated and actual income tax payable in prior years. Taxation expense is reflected in the statement of financial performance.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 15 STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2020
(D) FOREIGN CURRENCIES
Foreign currency transactions are translated to New Zealand currency at the exchange rate ruling at the dates of the transactions.
Monetary assets and liabilities in foreign currencies are translated at the exchange rate at balance date.
Exchange differences arising on the translation of monetary assets and liabilities are recognised in the statement of financial performance.
(E) REVENUE
Revenue derived from investments held during the year comprise dividend and interest income. Dividend income (excluding imputation tax credits) is recognised in the statement of financial performance when the dividend is declared and paid. Interest income is recognised in the statement of financial performance on an accrual basis and is not included in the market value of the investment.
(F) GOODS AND SERVICES TAX
The Trust is not registered for GST and therefore the statement of financial performance has been prepared with GST on expenses as a separate item.
(G) GRANTS
Grants are accounted for as they are approved to eligible organisations as approved by the Trustees. Grant adjustments relate to excess funds over that required to complete the project approved by the Trustees.
(H) CHANGES IN ACCOUNTING POLICIES
There have been no changes in accounting policies. All policies have been applied on a basis consistent with those used in previous years.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 16 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(1) GRANTS APPROVED Approved Approved and paid not paid Total $ $ $ Abbeyfield Palmerston North Inc 2,274 2,274 Alzheimers Society (Manawatu) Inc 72,443 72,443 Aotearoa Waitangi Awards Charitable Trust 4,568 4,568 Apiti Community Hall Community 19,550 19,550 Baptist Student Hostel Palmerston North 1,650 1,650 Best Care Whakapai Hauora Charitable Trust 27,749 27,749 Bunnythorpe Community Centre 158,600 158,600 Bush Multisport Trust 3,065 6,993 10,058 Bush Multisport Trust 3,864 3,864 Caccia Birch Trust Board 9,116 9,116 Celtic Spirit 20,000 20,000 Church on Vogel - House Next Door 22,226 22,226 Creative Sounds Society Inc 19,576 19,576 EECA Healthy Homes (Tararua Healthy Homes) 16,800 3,200 20,000 EECA Healthy Homes (Manawatu Healthy Homes) 88,366 91,634 180,000 Feilding & District Steam Rail Society 6,950 6,950 Feilding I A & P Association 5,816 5,816 Feilding Lifepoint Church 3,950 3,950 Feilding Little Theatre Players 114,277 114,277 Feilding Manchester Lions Club Inc 19,358 19,358 Feilding Old Boys Oroua Rugby and Netball Club 3,857 3,857 Globe Theatre Trust 64,633 64,633 Halcombe Community Development Group 15,404 15,404 Halcombe Community Development Group 1,245 1,083 2,328 Highland Home Christian Camp 2,663 2,663 Ice Breaker Aquatics 9,247 9,247 Kimbolton Arts & Sculpture Trust 5,000 5,000 Kimbolton Community Committee 12,208 12,208 Kind Hearts Trust 4,500 4,500 PNCC (2020 Festival of Cultures) 15,000 15,000 Lancewood Event Mgmt Ltd (2020 Esplanade Day) 7,000 7,000 Legacy Community Centre 7,248 7,248 Legacy Community Centre 17,640 17,640 Legacy Community Centre 5,330 5,330 Malcolm Hopwood - producer/creator 3,500 3,500 Manawatu & West Coast A & P Assoc - Annual Show 1,735 1,735 Manawatu Camera Club 2,500 2,500 Manawatu Jazz Club 13,730 13,730 Manawatu Lawn Tennis Club 35,289 35,289
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 17 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(1) GRANTS APPROVED (continued) Approved Approved and paid not paid Total $ $ $ Manawatu Lutheran Parish 5,312 5,312 Manawatu Rugby Union 20,000 20,000 Manawatu Scottish Society 2,415 2,415 Manawatu Softball Association 200,000 200,000 Manawatu Sports Foundation (SPOTY - 2020) 24,000 24,000 Manawatu Summer Shakespeare 5,000 5,000 Manchester House Social Services 8,663 8,663 Manfeild Park Trust - 2020 Grand Prix 30,000 30,000 Massey University Foundation - Refectory 250,000 250,000 Memorial Park Sports Trust Board 65,038 65,038 Milson Scout Group 2,250 2,250 Netball Manawatu Centre Inc 12,476 12,476 New Zealand Chinese Association 9,330 9,330 NZ Rural Games Trust 60,000 60,000 Northern Club (Manawatu) Inc 10,350 10,350 Pahiatua & District Museum Society 1,179 1,179 Pahiatua & District Museum Society 7,000 7,000 Pahiatua On Track 7,281 7,281 Palmerston North Basketball Association 49,839 49,839 Palmerston North Christian Leaders Association Inc 6,000 6,000 Palmerston North Community Arts Council 19,588 19,588 Palmerston North Dance Assn 10,000 10,000 Palmerston North Esplanade Scenic Railway Inc 8,541 8,541 Palmerston North Golf Club 10,045 10,045 Palmerston North Operatic Society 8,250 8,250 Palmerston North Operatic Society 8,517 8,517 Palmerston North Squash Gym 4,000 4,000 Palmerston North Street Van 2,100 2,100 Palmerston North Theatre Trust 17,994 17,994 Performance Consulting Ltd - New Year Event 2019/20 15,000 15,000 Piping and Dancing Assn of NZ 4,025 4,025 PNCC - Manawatu Military Tattoo 35,000 35,000 PNCC - Central Energy Trust Arena 220,000 220,000 Presbyterian Support Central 50,000 50,000 Project Litefoot Trust 8,604 8,604 Rangiwahia Environmental Arts Centre Trust 1,507 1,507 Rangiwahia Environmental Arts Centre Trust 1,284 1,284 Rotary Club of Makino 3,510 - 3,510 Softball 2020 Ltd 20,000 20,000 St Peter's Anglican Church 14,000 14,000
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 18 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(1) GRANTS APPROVED (continued)
Approved Approved Total and paid not paid $ $ $ Tararua District Council 200,000 200,000 Te Aroha Noa Community Services Trust 2,886 2,886 Te Rangimarie Marae 6,524 6,524 The Free Store Charitable Trust 2,657 2,657 The Salvation Army NZ Trust 17,114 17,114 Vision Community Trust - Te Whare Oranga 71,279 71,279 WildBase - Year 2 operational costs 25,000 25,000
$732,338 $1,782,057 $2,514,395
Add Grants approved in previous years and not paid.
Ashhurst Bowling Club Inc 4,007 Ashhurst Kindergarten 662 Ashhurst Pohangina Rugby Football Club 12,000 Awahou School 2,321 Awatapu College 1,780 Awatapu College 7,635 Awatapu College 17,144 Campbell Street Kindergaten 795 Cloverlea Kindergarten 1,100 Cloverlea Kindergarten 2,708 Crossroads (PN) Church Street 4,942 Feilding Civic Centre Trust 3,700 Highland Home Christian Camp 1,472 Holyoake Kindergarten 2,175 Kimbolton Early Learning Centre 2,296 Kind Hearts Trust 5,386 Linton Area Kindergarten 4,142 Makino Kindergarten 1,249 Manawatu Cricket Association 34,190 Manawatu River Zone Scouts 19,504 Manawatu Rugby Union 6,644 Manchester Kindergarten 2,240
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 19 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(1) GRANTS APPROVED (continued)
Add Grants approved in previous years and not paid.
Manfeild Park Trust 9,714 Massey University - Hockey Turf 200,000 MDC - Feilding Resource Recovery Centre 230,000 Milson Kindergarten 1,199 Milverton Kindergarten 188 Mount Biggs School 3,733 Order of St John Bush 50,000 Pahiatua Early Learning 809 Performance Consulting Ltd - Summer concerts 6,000 PNCC - Central Energy Trust Arena 100,000 Red Sox Sports Club 5,214 Riverdale Kindergarten 827 Roslyn Kindergarten 2,108 Somerset Kindergarten 2,769 Takaro Kindergarten 1,712 Tangimoana School 4,500 Tararua District Council 160,000 Te Kawau Amateur Swimming Club 30,000 Te Manawa Family Services 12,135 WildBase - Year 1 operational costs 25,000 YMCA 4,837 Total grants approved in previous years and not paid $988,837 Total grants approved, not paid as at 31 March 2020 $2,770,894
2020 2019 $ $
Grants owing 1 April 2,256,346 3,307,542 Grants approved during year 2,514,395 2,457,444 4,770,741 5,764,986 Grants paid during year - current period (732,338) (1,095,718) - prior periods (1,193,945) (2,381,571) (1,926,283) (3,477,289) Grant adjustments (73,564) (31,352) Total grants approved not paid as at 31 March 2020 $2,770,894 $2,256,346
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 20 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(2) CASH AT BANK 2020 2019 $ $
ANZ Bank cheque account 406 1,337 ANZ Bank deposit (on call) 753,014 5,738 ASB cheque account - 352,516 ASB Bank deposit (on call) - - Craigs Investment Partners accounts Craigs investment Partners NZD Broker account (7,813) (1,047,049) Craigs Investment Partners AUD call account 504,216 402,514 Craigs Investment Partners GBP call account 6,252 7,529 Craigs Investment Partners EUR call account 376,172 Craigs Investment Partners NZD call account 2,836,717 3,286,066 Craigs Investment Partners USD call account 290 1,554,294 Total Craigs Investment Partners accounts 3,715,834 4,203,354
$4,469,254 $4,562,945
The Craig’s Investment Partners accounts are held as part of the investment portfolio and are transacted through by Craig’s as part of administering the portfolio, the current balances are disclosed as above.
(3) SHARES AND SECURITIES 2020 2019 $ $
New Zealand Equities 12,480,620 17,979,550 Australian Equities 6,382,331 7,231,101 European Equities 469,588 732,195 United Kingdom Equities 399,308 597,050 United States of America Equities 9,910,015 8,760,577 Fixed Interest Securities 34,152,543 30,197,293 Property Investments 1,727,296 1,487,844 Total Investments $65,521,701 $66,985,610
Investment portfolio as at beginning of year 66,985,610 64,557,183 Maturities and realisation proceeds (25,946,831) (21,043,667) Reinvestments (at cost) 26,185,345 18,558,336 Realised profit on disposal of investments 1,289,704 1,065,087 Realised loss on disposal of investments (1,352,270) (827,162) 175,948 (2,247,406)
67,161,558 62,309,777
Unrealised gain/(loss) (1,639,857) 4,675,833
Total Investments $65,521,701 $66,985,610
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 21 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(4) TAXATION
2020 2019 $ $
Taxation Reconciliation
Operating Surplus before distributions 2,199,779 2,228,727 Permanent Differences
Adjustment for tax treatment of investment income 270,677 228,327
Imputation credits received 166,848 192,620
Non deductible expenditure 166,007 237,718 Taxable income available for distribution 2,803,311 2,887,392
Income distributed as beneficiary income (2,176,847) (2,160,692)
Taxation losses utilised (57,038) (56,147)
Net taxable income $569,426 $670,553
Taxation at 33% 187,910 221,282 Imputation credits utilised (158,874) (173,797) Taxation charge for the year $29,036 $47,485
Taxation Payable
Taxation charge for year 29,036 47,485 Taxation paid on foreign income (45,125) (47,485) Taxation distributed to beneficiaries 16,089 - Prior year taxation not yet received 24 - RWT paid 31 24
Taxation payable / (refundable) $55 $24
As at 31 March 2020 unutilised imputation credits of $7,973 (2019: $18,823) were converted to a loss of $24,161 (2019: $57,038). This loss is available to be applied against future taxable income.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 22 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(5) TRUST FUNDS
The Trust was established on 20 July 1993 with a gift of $10. In the year ended 31 March 1994 the Trust was gifted 7,623,270 shares in Central Power Limited at a value of $8,461,830. In the year ended 31 March 1995, 205,000 shares were transferred from Central Power Consumer Trust.
At 31 March 2000 the Trust held 11,766,170 shares in Central Power Limited. On 31 August 2000 the amalgamation between Powerco and Central Power Limited was effected and the Trust sold their shareholding to Powerco Limited for a consideration of $47.6 million.
On 16 June 2000 Central Power Electricity Trust entered a Memorandum of Understanding with Palmerston North City Council. The Council settled a sum of $1.5 million on the Trust.
(6) COMMITMENTS
Scholarships The Trust has a tertiary study scholarship scheme, whereby recipients are awarded a scholarship or tertiary study bursary for the term of up to four years providing certain conditions are met. At 31 March 2020 the commitment to future scholarships is as follows:
2020 2019 $ $
2020 - 53,000 2021 48,000 29,000 2022 23,500 - $71,500 $82,000
Grants The Trust has agreed to make allocations from future income to approved entities subject to all relevant criteria being meet. At 31 March 2020 future income allocations were as follows:
2020 - 347,000 2021 495,000 735,000 2022 - 2024 735,000 595,000 2025 - 2029 350,000 - $1,580,000 $1,677,000
The Trust entered into an agreement with Palmerston North City Council (PNCC) to fund $2,200,000 to facilitate a programme to develop the infrastructure of Arena Manawatu, which was subsequently named Central Energy Trust Arena. The commitment to funding is over a ten year period. As at 31 March 2020 funding of $1,070,000 (2019: $850,000) had been identified and allocated, payments at balance date total $750,000 (2019: $300,000).
The Trustees have agreed to make $25,000 per annum available to the Wildbase Recovery Project for payment towards operational costs. The commitment to funding is over a ten year period. As at 31 March 2020 funding of $50,000 (2019: $25,000) had been allocated.
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 23 ancialNOTES Statements TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(6) COMMITMENTS (continued)
The Trust entered into an agreement with The Bio Commerce Centre Ltd to fund up to $500,000 to provide seed funding for new business development. As at 31 March 2020 a total of $399,970 (2019: $399,970) has been paid. The remaining funds will be made available subject to clearly identified criteria with a maximum of $200,000 being allocated in any one financial year.
The Trust have agreed to fund up to $500,000 to Massey University Foundation towards electrical costs associated with the restoration, strengthening and repurposing of the historic Massey University Refectory building. As at 31 March 2020 a total of $250,000 has been allocated.
(7) STATEMENT OF CONTINGENT LIABILITIES
There are no contingent liabilities in this reporting period (2019: Nil)
(8) RELATED PARTY TRANSACTIONS
The Trust maintains an interests register of all Trustees personal interest. Grants have been approved during this year for the following entities in which one or more Trustees have an interest. The Trustees declared their involvement with the entity and did not participate in the grant allocation process where appropriate.
2020
P T Askey Manawatu Rugby Union Manfeild Park Trust Palmerston North City Council Palmerston North Theatre Trust Tararua District Council
R M Karaitiana Best Care Whakapai Hauora Charitable Trust Crossroads Church (PN) Trust St Peters Anglican Church Te Aroha Noa Community Services Te Rangimarie Marae
R J Wong NZ Chinese Association Wildbase Recovery Centre
M Georgel Palmerston North Theatre Trust
M J Kouvelis Manfeild Park Trust NZ Rural Games Trust
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(8) RELATED PARTY TRANSACTIONS (continued)
2019
P T Askey Manfeild Park Trust Palmerston North City Council Ruahine Kindergarten Association Tararua District Council The Bio Commerce Centre Ltd
R M Karaitiana The Bio Commerce Centre Ltd (via Manawatu Bio Commerce Trust) Crossroads Church (PN) Trust Te Aroha Noa Community Services
R J Wong Massey University Wildbase Recovery Centre Rotary District 9940
M Georgel Palmerston North Theatre Trust Arohanui Hospice Service Trust The Bio Commerce Centre Ltd
M J Kouvelis Manfeild Park Trust
CENTRAL ENERGY TRUST 2020 ANNUAL REPORT Page | 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
(9) MANAWATU HEALTHY HOMES LIMITED
Central Energy Trust owns 100% of the shares.
Manawatu Healthy Homes Limited was formed purposely for the distribution of funds to the Manawatu Healthy Homes Project.
The Manawatu Healthy Homes Limited accounts have not been consolidated as they have no material effect. As at 31 March 2020 the Company was designated non active and all Healthy Homes funding was funded directly by Central Energy Trust.
2020 2019 $ $
Interest received 1 - Net profit/(loss) 1 -
Retained Earnings at beginning of the year 435 435 Current year profit/(loss) 1 - Retained earnings end of the year 436 435
Represented by: ANZ Bank cheque account 436 435
(10) EVENTS AFTER BALANCE DATE
On March 11, 2020, the World Health Organisation declared the outbreak of COVID-19 (a novel Coronavirus) a pandemic. Two weeks later, on 26 March 2020, New Zealand increased its' COVID-19 alert level to level 4 and a nationwide lockdown commenced. As part of this lockdown all businesses were closed and consequently some were able to re-open under level 3 guidelines on Tuesday 28th April 2020. Globally countries around the world have imposed varying forms of lockdown which has impacted global economies, trade, and supply. While this disruption is currently expected to be temporary, there is a level of uncertainty around the duration of global market disruption.
At balance date the financial statements, investments held by the Trust were negatively impacted by global financial market volatility. As a result, the market value of investments suffered a reduction and unrealised gains accumulated during the year were off set and a loss reflected. At the date of issuing the financial statements financial markets have rebounded and investment values have been recovered.
In addition, global market disruption caused by COVID-19 is expected to have an impact on future dividend income, however at this time the full financial impact is not able to be determined.
There are no other events that have occurred after balance date that would have a material impact on the financial statements.
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