Statement of Corporate Intent Mainpower New Zealand Limited Directory

2019 – 2020 Statement of Corporate Intent MainPower New Zealand Limited Directory MainPower New Zealand Limited Board of Directors Senior Leadership Team Address Tony King Andy Lester 172 Fernside Road Chairman Chief Executive PO Box 346, Rangiora 7440 Graeme Abbot Mark Appleman Director General Manager – Network Telephone: 0800 30 90 80 Janice Fredric Sarah Barnes www.mainpower.co.nz Director General Manager – Finance Fraser Jonker Karen Cameron Director Safety and Business Risk Manager Stephen Lewis Geoff Gale Director Chief Information Officer Brian Wood Penny Kibblewhite Director General Manager – Customer and Corporate Relations Sandra O’Donohue General Manager – People and Culture Bob Taylor General Manager – Operations (Acting) Todd Voice General Manager – Commercial MainPower Trust Trustees Address Kevin Brookfield c/o Ms Kathy Hansell Chair Trust Secretary Richard Allison MainPower Trust Deputy Chairman PO Box 370, Rangiora 7440 Jim Abernethy Telephone: (03) 313 4509 Trustee Jo Ashby Facsimile: (03) 313 4509 Trustee www.mainpowertrust.org.nz Allan Berge Trustee Quentin de Hamel Trustee Hugh Lindo Trustee Contents 1 Introduction 1 2 Letter of Expectations 3 3 Statement of Intentions 5 3.1 About Us 5 3.2 Generation 5 3.3 Our Changing Future 5 3.4 Our Strategic Direction 5 4 Strategic Priorities 7 5 Business Priorities 9 5.1 Asset management 9 5.2 Operational excellence 10 5.3 Network pricing 10 5.4 Managing our risk 11 5.5 Environmental responsibility 11 5.6 Community engagement 12 5.7 Community support 12 5.8 People and culture 14 6 Other Business Activities 15 6.1 Generation 15 6.2 Kākāriki Power 16 6.3 Vircom Energy Management Services 16 6.4 Hurunui Water Project / Amuri Irrigation 16 7 Performance 17 7.1 Financial Performance 17 7.2 Service Performance 17 7.3 Performance Statement Financial - MainPower Group 19 7.3 Performance Statement Financial - MainPower Parent 20 7.4 Performance Statement Customer Service and Statistics 21 8 Other Measures 23 8.1 Distributions to the MainPower Trust 23 8.2 Rebates to Qualifying Customers 23 8.3 Acquisition of shares in other companies 23 8.4 Return on investment for the MainPower regulatory lines business 23 8.5 Return on shareholders’ equity for the MainPower Group of Companies (Consolidated) 23 8.6 Information to be provided to shareholders 23 Appendices Appendix 1: Corporate Governance Statement – 25 Appendix 2: Statement of Accounting Policies – 28 Appendix 3: Glossary of Terms and Abbreviations – 34 MainPower New Zealand Limited is an electricity distribution business servicing the North Canterbury region – from North of the Waimakariri River, through Hurunui and into Kaikoura – we’re committed to contributing towards a bright future for our region by delivering an electricity network that is ready for the future. 1 Introduction This Statement of Corporate Intent (“SCI”) is (h) the procedures to be followed before any submitted to the MainPower Trust (the “Trust”) members of the group subscribes for, by the Board of MainPower New Zealand Limited purchases or otherwise acquires shares in any (“MainPower”) (the “Board”). company or other organisation; This SCI is prepared in accordance with clause 3 of (i) an estimate of the amount of fixed and variable MainPower’s Constitution. line charge revenue received from “Qualifying The SCI covers the activities of MainPower and its Customers” (as defined in the Trust Deed) subsidiaries, and sets out MainPower’s intentions of the Company during the “Financial Year” and the objectives agreed between the Board and (as defined in the Trust Deed) that is to be the Trustees for the Financial Year commencing 1 made available to Qualifying Customers of April 2019, and the two succeeding financial years. the Company in the “District” (as defined in the Trust Deed) during the Financial Year The following appendices are made available in or the following Financial Year in the form of support of the SCI: “Customer Discounts” (as defined in the Trust – Corporate Governance Statement Deed) or “Customer Rebates” (as defined in – Statement of Accounting Policies the Trust Deed) and the method for allocation of them; Clause 3 of MainPower’s Constitution requires the SCI to provide detail on the following: (j) A statement of performance relating to “Adjusted Shareholders’ Funds” which will (a) the objectives of the group; provide: (b) the nature and scope of the activities to be (i) the total value of Adjusted Shareholders’ undertaken; Funds (as defined in the Trust Deed); (c) the ratio of consolidated Shareholders’ funds to (ii) a statement specifying the Directors’ total assets and definitions of those terms; opinion on the optimum, before the (d) the accounting policies used in respect of the payment of tax, weighted average cost of Statement of Corporate Intent; capital for the Company; (e) the performance targets and other measures (iii) a statement of the method applied in (ii); (including the rate of return on Shareholders’ and funds after payment of tax) by which the (iv) the estimated rate of return on total performance of the group may be judged in Adjusted Shareholders’ Funds and the relation to its objectives; estimated shortfall (if any) with respect to (f) an estimate of the amount or proportion of (ii) before the payment of tax and before accumulated profits and capital reserves that is the granting of Customer Rebates; and intended to be distributed to the Shareholders; (k) such other matters as are agreed by the (g) the kind of information to be provided to the Trustees and Directors. Shareholders by the group during the course of those financial years, including the information to be included in each half-yearly report; 1 2 2 Letter of Expectations The Letter of Expectations provided by the MainPower Trust, forms an important part of the Statement of Corporate Intent. The expectations of the Trust are taken into account during strategy development and when reviewing how the Company is operated. Trustees will be consulted in circumstances where the Board’s intentions are at variance to these expectations. Ownership of MainPower Health & Safety value of the capital of the Trust and Last year’s Capital Distribution The safety of MainPower staff recognise the potential for capital Review confirmed that our and the community will continue value appreciation. beneficiaries remain supportive to remain a major focus for the Return on Investment of the Trust’s continued 100% Company. The expectation is ownership of the Company. that the Company will be a good The Board will structure its corporate citizen, making sure business operations, including The Board will advise the Trust funding and the pricing of its immediately on becoming aware safety around electricity is a priority for staff and all members of the services, in order to earn an of any circumstances which could appropriate return on investment. potentially result in a change to community, whether or not they are customers. The Trust seeks The Trust expects that, when the Trust’s 100% ownership of the possible, surpluses not required Company. reassurance that MainPower is promoting a positive safety culture to fund the business and its Governance resulting in a safer, healthier and development will be returned to more productive workplace. This the Trust’s beneficiaries. Continuing adherence to the should exceed rather than merely principles of good governance Currently these returns are meet the requirements of the is a fundamental expectation. distributed to Qualifying Health and Safety at Work Act A competent, well balanced, Customers in the form of rebates 2015. Safety is a cornerstone of commercial and community off their electricity accounts. The the MainPower brand. The Trust focused Board will be developed methodology for distributing these expects that the results of the and structured to face the current returns in future is under review annual Health & Safety audit will and expected future issues facing and the Trust and Board have be communicated to the Trust on a the Company and the industry in established a joint Working Group timely basis. which it operates. The Trust further for the purpose of this review. It is expected that the Board will use its expects that regular monitoring of Investment Decisions the Board’s performance will be best endeavours and will support undertaken, both by peer review The Board will, when making Trustees in bringing this matter to a and independent evaluation, to investment decisions, take into conclusion as soon as possible. ensure that the skill sets which account the Trustees obligations have been identified as necessary under Sections 138 and 13E of Part for the Board’s performance are 2, Investment, of the Trustee Act maintained and exercised. It is 1956, which requires Trustees as expected that the Board will also the Ordinary Shareholders of the consider and address succession Company, to act prudently in terms issues. of the Trust’s own investments and to have regard to the need for the Trust to maintain the real 3 Scope of Business Customer Relationships Stakeholder Relationships Operations The Trust acknowledges that In addition to the customer and The Board will continue to the ICP holders (as customers staff relationships, central to the give priority to the ongoing of MainPower) are the primary realisation of the organisation’s development and operation of the stakeholders of the Company. objectives is the building electricity network in the North This is emphasised by the fact of relationships with other Canterbury and Kaikoura regions that most of the customers are stakeholders. Transparency, as the Company’s core business. in fact beneficiaries of the Trust openness and respect in The Board will investigate and, by virtue of that relationship. interactions with all stakeholders if deemed appropriate, invest The Trust expects that the Board will be especially important as in opportunities for core and will ensure that customers are the Company faces technological, unrelated business expansion both given appropriate attention and pricing, and investment challenges within and beyond the Company’s consideration, and that the level in the foreseeable future.

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