For the Year Ended 31 March 2018

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2008 Chairpersons Report.pub

FOR THE YEAR ENDED 31 MARCH 2018

Central Energy Trust PO Box 1242, Palmerston North 4440 32 Amesbury Street, Palmerston North 4410 Ph (06) 358 4163 Fax (06) 356 5196 www.centralenergytrust.org.nz

Central Energy Trust are proud to have supported the Hilux New Zealand Rural Games. Photos to the right are from the 2018 Hilux New Zealand Rural Games.

Contents

Trust directory 1

Chairperson’s report 2

Statement of financial performance 9

Statement of movements in trust funds 10

Statement of financial position 11

Statement of accounting policies 12

Notes to the financial statements 14

Auditor’s report 23

Trust Directory

AS AT 31 MARCH 2018

Settlors Messrs H D King and A E Gracie (Deceased)

Trustees Mr R J Titcombe (Chair) MNZM, JP, GradDipBusStud appointed 1 October 2012 (Dispute Resolution), AAMINZ

Mrs G M C May (Deputy Chair) Dip.Bus Studs, MBA (Dist) appointed 1 October 2009

Mr P T Askey BBS, appointed 1 October 2012 NZ Certificate in Engineering (Civil) Registered Engineering Associate

Mr R J Wong BSc, CFInstD appointed 1 October 2012 FNZIFST

Mr R M Karaitiana MBA, B.Arts appointed 1 October 2015 Certificate in Company Direction

Accountant/Secretary Billie Stanley CA, PGDip (Prof Accounting) BDO Central (NI) Limited 32 Amesbury Street PALMERSTON NORTH

Bankers ANZ Bank of New Zealand Limited Rangitikei Street PALMERSTON NORTH

ASB Bank 138 The Square PALMERSTON NORTH

Auditors Cotton Kelly Chartered Accountants Northcote Park Queen Street PALMERSTON NORTH

Solicitors Wadham Goodman M R Wadham PO Box 345 PALMERSTON NORTH

Investment Advisors Craigs Investment Partners Vero Centre 48 Shortland Street AUCKLAND

CENTRAL ENERGY TRUST

Chairperson’s Report

It is my pleasure to present the Trust’s report for the 2017-2018 year.

Reports over recent years have referred to the volatile nature of the global financial and investment markets, and the low interest environment. The 2017-2018 year has been no different. Despite these influences it is pleasing to note that over the past few years revenue returns have remained steady and strong dividend flows have allowed funds available for distribution to be reasonably maintained. It is pleasing that the focus of Trustees to have a strategy with an emphasis on investments in fixed interest securities and New Zealand equities, with some extended exposure to international equities, has stood the Trust in good stead.

Results for the 2017-2018 year have seen:  an income return for the year of $2,520,274 – a reasonable return in the current financial market,  total Trust funds reach a level of $66 million, and  accumulated income reserves maintained at $7 million.

These results have enabled the Trust to provide grant and funding assistance to the value of $2.3 million to 96 community organisations and projects. These have included significant contributions to:  Manawatu District Council - towards the development of the Feilding Resource Recovery Centre.  Palmerston North City Council - towards energy related expenditure at Central Energy Trust Arena.  Cornerstone Christian School - towards the school’s gymnasium/hall development.  Te Manawa Museums Trust - to upgrade the Museum’s CCTV security system.  Manfeild Park Trust - towards the race circuit, National Driver Training Centre and storage facilities.  Longburn Adventist College - to assist with a heating system upgrade.  Palmerston North Girls’ High School - to assist with a heating and cooling system upgrade.  College Old Boys’ Rugby Football Club - towards LED floodlighting.

2 CENTRAL ENERGY TRUST

Chairperson’s Report - continued

Last year the Trust was pleased to have been able to announce funding assistance to the Palmerston North City Council to enable the Central Energy Trust Wildbase Recovery Centre get underway. The Trust has taken a keen interest in that project and has committed an annual operational grant of $25,000 to assist with the Centre’s ongoing running costs. We look forward to the opening of the Centre in a few weeks time.

It was again a pleasure to host a group of young student recipients of the Trusts academic and vocational scholarships at our annual scholarship evening in February. This year twenty one students were successful in gaining bursaries towards the cost of their studies over the next three or four years. In order to encourage a stronger level of interest in this programme Trustees introduced a supreme scholarship award of $15,000 ($5,000 per annum over three years). The high standard of applicants this year presented the interviewing Trustees with a dilemma when trying to identify one worthy recipient. The problem was solved by the Trust agreeing to award two supreme scholarships. The successful recipients were Helen Liu (from Awatapu College) and Mitchell Kinghorn (from Palmerston North Boys’ High School). Trustees appreciate the support of local secondary schools in encouraging those students who intend to continue their studies locally to apply for assistance.

The Trust continues to be well served by the support of staff at BDO Central (NI) Ltd and, in particular, the advice and support of Secretary Ron Eglinton. Ron has indicated his intention to now step down from that role after having been involved with the Trust over the majority of the life of the Trust – some 23 years. I would take this opportunity, on behalf of current Trustees and the many former Trustees, to extend our gratitude to Ron for his professionalism and knowledgeable advice over those years. Ron has played a major role in the success of Central Energy Trust. Ron’s replacement in the secretarial role is BDO Central partner Ms Billie Stanley. Billie has already been providing Trustees with advice and assistance over a transitional period and will, I’m sure, continue the high standard of support that we have enjoyed. Trustees also appreciate the ongoing support and advice from professional advisors Craigs Investments Partners and Senior Investment Advisor Nigel Scott, Wadham Partners and auditors Cotton Kelly.

3 CENTRAL ENERGY TRUST

Chairperson’s Report - continued

In accordance with the terms of the Trust Deed, at least two Trustees shall retire in each three year cycle; and 2018 is such a year. The Deed also limits the appointment of any person to a maximum of nine years. This year the two Trustees retiring are Deputy Chair Margaret May and myself. As Margaret will have served the Trust for nine years she is not eligible for reappointment. I have served with Margaret for most of those nine years and have valued and appreciated the contribution she has made to the way Trustees have worked together as a cohesive team. Margaret’s knowledge of the community will be missed, and we wish her well with the many other community hats she wears.

As mentioned, I am also standing down and, although eligible, I have decided not to seek reappointment. My seven years as a Trustee, the last three as Chair, has given me much pleasure. It has been a privilege to have been involved with the Trust, and to have been able to play a part in helping community organisations develop and enhance their assets and facilities. My heartfelt personal thanks go to my supportive and dedicated fellow Trustees; Deputy Chair Margaret May, Peter Askey, Rodney Wong and Ruma Karaitiana, and to the team at BDO.

Rod Titcombe Chairperson

4 CENTRAL ENERGY TRUST

Grants Criteria

The Trustees in exercising their absolute discretion under the Trust Deed will consider the following criteria:

 Supporting energy related applications of benefit to the community.

 Considering applications which create ongoing benefit to the greatest number of consumer beneficiaries.

 Maintaining equity between the communities within the region.

 Assisting business growth and economic development within the community.  Promoting energy conservation.  Providing education scholarships.

Grants

Major grant allocations during the 2017 - 2018 year include:

Cornerstone Christian School 250,000 Manawatu District Council 230,000 PNCC – Central Energy Trust Arena 200,000 Te Manawa Museums Trust 175,000 Manfeild Park Trust 148,483 Longburn Adventist College 85,807 Palmerston North Girls High School 75,000 College Old Boys RFC 62,190

Grants were made to ninety six organisations making the total allocation for the year, $2.3 million.

The wide range of entities covering sporting, education, charitable, and community organisations that have benefited from the Trust are set out in Note 1 of the accounts. When Trustees have a personal association with an entity applying for a grant they have abstained from the approval process.

5 CENTRAL ENERGY TRUST

Academic and Trade Bursaries

This financial year twenty one students were awarded Academic and Vocational Scholarships. Bursars studying over the next three to four years are:

Jamie Baldwin Bachelor of Nursing Bella Dickins Bachelor of Nursing Joshua Gray Bachelor of AgriScience Bridget Hogan Bachelor of AgScience Stanley Jackson Bachelor of Engineering Mitchell Kinghorn Bachelor of Science Helen Liu Bachelor of Food Technology Keely McKnight Bachelor of Communications Samara-Rose Malthus-Henman Bachelor of Business Sheldon Mayo Bachelor of Ag Science Kelly Ngan Bachelor of Food Technology Emma Ractliffe Bachelor of Veterinary Science Kokila Shirley-Lee Whale Bachelor of Veterinary Science Sara Swansson NZ Diploma in Cookery (Advanced) Madison Taylor Bachelor of Nursing Heidi Thomson Bachelor of Health Science (Phycology) Gabrielle Tizard-Tongs Bachelor of Arts – Psychology Sulieti Vai Bachelor of Social Work Sarah White Bachelor of Social Work Jakaia Williams Bachelor of Maori Visual Arts Ainsleigh Wills Bachelor of Social Work

This year the Trust introduced the Central Energy Trust Supreme Award for the recognition of outstanding applicants. The Supreme Award totals $15,000 and provides the recipients with $5,000 per annum over a period of 3 years. The Bursary sub-committee were impressed with the high calibre of applicants and agreed to award two Supreme Awards in the inaugural year. The recipients of these awards were Mitchell Kinghorn and Helen Liu.

6 CENTRAL ENERGY TRUST

Financial Report

The result for the financial year shows an overall surplus of $3,703,876. This result comprises an operating loss of $168,549 and upward movement in investments of $3,872,425. Income for the year was marginally lower as a result of lower interest and dividends returns however, the increase in investment values afforded the Trustees the ability to approve grants over the historical precedent of $2 million while still increasing Trust Funds.

At 31 March 2018 the Trust Capital Fund stood at $59,208,217 and the Accumulated Income Reserve at $7,013,088. The following table sets out the value of Trust Funds over the history of the Trust.

Growth in Return Trust Accumulated Total Trust Trust Allocations including Year Capital Income Funds Funds Made Allocations 1995 9,392,650 404,005 9,796,655 16% 51,543 17% 1996 26,795,527 1,293,632 28,089,159 187% 39,646 187% 1997 29,438,558 1,636,871 31,075,429 11% 514,573 12% 1998 25,632,307 2,106,150 27,738,457 -11% 531,767 -9% 1999 30,707,308 3,152,380 33,859,688 22% 816,458 25% 2000 26,291,238 3,513,976 29,805,214 -12% 1,308,962 -8% 2001 37,067,955 3,659,327 40,727,282 37% 3,292,357 48% 2002 37,574,678 3,837,410 41,412,088 2% 1,774,552 6% 2003 36,549,808 4,367,589 40,917,397 -1% 2,021,382 4% 2004 38,314,696 4,317,963 42,632,659 4% 2,385,553 10% 2005 39,941,750 4,475,855 44,417,605 4% 2,225,174 9% 2006 43,243,630 5,282,621 48,526,251 9% 1,807,930 13% 2007 45,380,998 5,664,977 51,045,975 5% 2,172,326 10% 2008 41,535,910 5,941,588 47,477,498 -7% 2,632,343 -2% 2009 36,649,931 7,010,592 43,660,523 -8% 1,954,956 -4% 2010 41,380,277 6,945,362 48,325,639 11% 2,684,859 17% 2011 42,251,075 7,096,045 49,347,120 2% 2,185,902 7% 2012 40,378,477 7,635,188 48,013,665 -3% 1,910,569 1% 2013 45,011,936 8,086,985 53,080,921 11% 1,896,996 15% 2014 46,633,275 8,495,942 55,129,217 4% 1,974,023 8% 2015 50,947,912 8,547,929 59,495,841 8% 2,465,266 12% 2016 53,880,513 8,623,935 62,504,448 5% 2,440,390 9% 2017 55,335,792 7,182,125 62,517,917 0% 3,762,930 6% 2018 59,208,217 7,013,088 66,221,305 6% 2,278,660 10% $45,129,117

7 CENTRAL ENERGY TRUST

Financial Report - continued

Total grants and allocations approved during the year amounted to $2.3 million (2017 $3.8 million) and at balance date Grants approved but not paid amounted to $3.3 million (2017; $2.6 million). Over the past five years the Trust Fund has experienced a period of positive growth, increasing by over 25%.

The Trustees continue to receive monthly reporting from investment managers Craigs Investment Partners. Mr Nigel Scott continues to undertake six monthly visits to meetings of the Trustees to review market movements and trends. While investments markets have experience recent volatility these procedures ensure compliance with the established Statement of Investment Policy and Objectives.

The budget for the 2019 year predicts marginally lower income levels as a result of availability of high yielding interest bearing instruments and lower dividends. Expenditure in total will increase with the Trust embarking on the triannual Trustee appointment program however, a budgeted operating surplus is forecast to enable the Trustees to continue to support Palmerston North, Manawatu and Tararua communities in line with the Trust’s objectives.

Financial Report - continued

Rod Titcombe Margaret May Peter Askey Chairperson Deputy Chair

Rodney Wong Ruma Karaitiana Ron Eglinton Secretary

Statement of Financial Performance

FOR THE YEAR ENDED 31 MARCH 2018

Note 2018 2017 $ $ Income Dividends 926,508 1,045,790 Interest 1,593,766 1,695,929 2,520,274 2,741,719 Expenses Accounting and administration 87,195 79,910 Advertising 7,714 8,195 Audit fees 6,000 5,800 Bank charges and fees 242 311 Bursary and AGM expenses 4,488 3,849 Consultants fees (internal) 5,935 5,100 Foreign exchange loss 41,306 52,404 Insurance (Trustees) 4,447 3,735 Legal fees - 802 Portfolio management 93,799 93,403 Printing, stationery, and tolls 5,179 5,103 Secretarial fees 25,230 31,613 Trustees expenses 887 1,077 Trustees fees 60,250 59,021 Website expenses 530 530 GST on expenses 28,541 28,281 371,743 379,134 Operating surplus before distributions 2,148,531 2,362,585

Allocations Bursaries and scholarships paid (75,000) (82,000) Grants approved during the year 1 (2,276,990) (3,905,717) Grant adjustments 1 73,330 224,787 Total allocations to beneficiaries (2,278,660) (3,762,930) Income surplus (loss) before tax (130,129) (1,400,345)

Taxation for the year 4 (38,420) (28,650) Income surplus (loss) after tax (168,549) (1,428,995)

Investment portfolio movements Realised profit on disposal of investments 3 1,354,721 310,496 Realised loss on disposal of investments 3 (389,044) (776,878) Unrealised changes in investment values 3 2,906,748 1,921,661 Total investment portfolio movements 3,872,425 1,455,279 Trust surplus (loss) after tax and $3,703,876 $26,284 provision for grants

This statement is to be read in conjunction with the statement of accounting policies and notes to the financial statements. 9

Statement of Movements in Trust Funds

FOR THE YEAR ENDED 31 MARCH 2018

Note 2018 2017 $ $

Trust funds at beginning of year 62,517,917 62,504,448 Net surplus (loss) for the year after tax 3,703,876 26,284 and provision for Grants Tax charge on behalf of beneficiaries (488) (12,815) Trust funds at end of year 5 $66,221,305 $62,517,917

Represented by:

Trust capital brought forward 55,335,792 53,880,513 Total investment portfolio movements 3,872,425 1,455,279 Trust capital at end of the year $59,208,217 $55,335,792

Accumulated income reserve brought 7,182,125 8,623,935 forward Operating surplus 2,148,531 2,362,585

Less: Total allocations to beneficiaries (2,278,660) (3,762,930) (130,129) (1,400,345) Tax charge for the year (38,420) (28,650) Tax charge on behalf of beneficiaries (488) (12,815) Accumulated income reserve $7,013,088 $7,182,125 at end of year

This statement is to be read in conjunction with the statement of accounting policies and notes to the financial statements. 10

Statement of Financial Position

AS AT 31 MARCH 2018

Note 2018 2017 $ $

Trust capital 59,208,217 55,335,792 Accumulated income reserve 7,013,088 7,182,125 Trust Funds 5 $66,221,305 $62,517,917

Represented by:

Current Assets Cash at bank 2 2,875,982 1,544,620 Term deposits 1,876,518 1,903,539 Accrued interest 270,219 290,413 Taxation receivable 4 - 5,012 5,022,719 3,743,584 Non-current Assets Shares and securities 3 64,557,183 61,461,795 Total Assets 69,579,902 65,205,379

Current liabilities Accounts payable 51,055 82,759 Grants approved not paid 1 3,307,542 2,604,703 Total Liabilities 3,358,597 2,687,462 Total Net Assets $66,221,305 $62,517,917

This statement is to be read in conjunction with the statement of accounting policies and notes to the financial statements. 11 .

Statement of Accounting Policies

FOR THE YEAR ENDED 31 MARCH 2018

(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.

(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.

Statement of Accounting Policies

(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. A

f Accounting Policies

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

(1) GRANTS APPROVED

Approved Approved and paid not paid Total $ $ $ Arohanui Hospice 8,868 - 8,868 Ashhurst Pohangina Rugby Football - 12,000 12,000 Club Ashhurst School 5,426 - 5,426 Awapuni Rotary Club - 51,014 51,014 Awatapu College - 24,779 24,779 Bainesse School - 6,090 6,090 Baptist Student Hostel PN 15,576 - 15,576 Beef Expo Inc 11,206 - 11,206 Bush Multisport Trust 9,970 - 9,970 Camelia House Trust 3,360 - 3,360 Cheltenham Community Committee 20,179 - 20,179 Cloverlea Kindergarten - 1,100 1,100 College Old Boys RFC - 62,190 62,190 Cornerstone Christian School - 250,000 250,000 Eden Christian Kindergarten - 7,060 7,060 Eketahuna Health Centre Trust Inc 767 - 767 Feilding I A & P Association 6,425 - 6,425 Feilding Civic Centre Trust - 3,700 3,700 Feilding Kindergarten - 1,989 1,989 Feilding Old Boys Oroua Rugby and 1,975 - 1,975 Netball Club Feilding Playcentre 2,422 - 2,422 Freyberg High School 36,842 - 36,842 Glen Oroua School 9,380 - 9,380 Halcombe School 18,327 - 18,327 Hockey Manawatu Inc 2,974 - 2,974 Hokowhitu School - 14,382 14,382 Homes for People Trust - 34,778 34,778 Housing Advice Centre 312 - 312 Lancewood Event Management (2018 - 15,000 15,000 Festival of Cultures) Lancewood Event Management (2018 7,000 - 7,000 Esplanade Day) Legacy Community Centre 10,000 - 10,000 Longburn Adventist College - 85,807 85,807 Luck Venue 5,280 - 5,280 Makino Kindergarten - 3,238 3,238 Makuri Domain Board 3,340 - 3,340 Manawatu & West Coast A&P Assoc - 4,022 4,022 (Annual A & P Show) Manawatu & West Coast A&P Assoc (Annual Dairy Event) - 4,798 4,798 Manawatu Community Trust 19,667 - 19,667 Manawatu Gang Show - 3,910 3,910 Manawatu Home Budgeting Service Inc - 4,927 4,927 Manawatu Jazz & Blues Festival - 21,535 21,535 Manawatu River Zone Scouts - 19,504 19,504 Manawatu Rugby Union 19,965 - 19,965 Manawatu Sports Foundation (SPOTY 4,000 - 4,000 2016) 14

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

(2) GRANTS APPROVED

Approved Approved and paid not paid Total $ $ $ Manawatu Sports Foundation (SPOTY - 24,000 24,000 2017) Manawatu Summer Shakespeare (School - 5,000 5,000 of English & Media Studies 2018) Manchester House Social Services 11,825 - 11,825 Manfeild Park Trust 30,000 188,483 218,483 MDC Feilding Resource Recovery Centre - 230,000 230,000 Milson Scout Group 356 - 356 Netball Manawatu Centre Inc 8,470 - 8,470 New Zealand Chinese Association - 31,473 31,473 NZ Rural Games Trust 50,000 - 50,000 Order of St John Bush - 50,000 50,000 Order of St John PN - 2,558 2,558 Pahiatua & District Museum Soc - 5,117 5,117 Pahiatua Golf Club 4,583 1,312 5,895 Pahiatua Repertory Society 15,286 - 15,286 Pahiatua School - 1,822 1,822 Palmerston North Christian Leaders Association Inc 6,000 - 6,000 Palmerston North Dance Association 10,000 - 10,000 Palmerston North Esplanade Scenic 10,911 14,509 25,420 Railway Inc Palmerston North Girls High School - 75,000 75,000 Palmerston North Methodist Social 3,477 - 3,477 Services Palmerston North Squash Gym 10,000 - 10,000 Palmerston North Street Van 4,326 - 4,326 Palmerston North Theatre Trust 19,995 - 19,995 Performance Consulting Ltd 15,000 6,000 21,000 Plant to Plate Aotearoa 276 - 276 PNCC – Central Energy Trust Arena - 200,000 200,000 Project Litefoot Trust 15,800 - 15,800 Rangiwahia Environmental Arts Centre 1,288 - 1,288 Trust Ross Intermediate School 23,592 - 23,592 Rotary Club of Makino 9,491 - 9,491 Shepherds Rest - 26,047 26,047 Start Singing - 10,000 10,000 Studio on the Square - 2,925 2,927 Takaro Association Football Club Inc - 14,345 14,345 Te Kura Kaupapa Maori o Manawatu 7,045 - 7,045 Te Manawa Museums Trust – CCTV - 175,000 175,000 Upgrade Te Roopu Oranga o Highbury - 5,898 5,898 The Bio Commerce Centre Limited 25,000 - 25,000 The Rugby Museum of NZ 7,481 - 7,481 The Salvation Army NZ Trust - 32,014 32,014 Voice Thru Your Hands Charitable Trust - 5,000 5,000

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

Approved Approved and paid not paid Total $ $ $

Westend Kindergarten - 2,974 2,974 Westpac Business Awards - 8,000 8,000 Winchester School 14,227 - 14,227

$527,690 $1,749,300 $2,276,990

Add Grants approved in previous

years and not paid. Awatapu College 18,216 Bush Multisport Trust 150,000 Cloverlea Kindergarten 4,184 Combined Churches Opportunity Shop 2,475 EECA Healthy Homes (Tararua Healthy Homes) 11,807 2016-2017 EECA Healthy Homes (Manawatu Healthy 102,267 Homes) 2016-2017 Feilding Scout and Guide Hall Committee 10,200 Future Beef New Zealand 2,200 Globe Theatre Trust 66,372 Hokowhitu Kindergarten 4,832 Human Aid Focus 1,700 Kairanga School 1,530 Life Education Trust Manawatu 15,000 Lutheran Homes Trust Board 7,710 Manawatu Mountain Bike Club Inc 3,220 Poupatate Marae 13,710 Ruahine Kindergarten Association 7,236 St Josephs School 583 Te Kawau Amateur Swimming Club 30,000 Voice Thru Your Hands Charitable Trust 5,000 Wildbase – Esplanade Aviary 1,100,000 Total grants approved in previous years $1,558,242 and not paid Total grants approved, not paid as $3,307,542 at 31 March 2018

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

(1) GRANTS APPROVED (continued)

2018 2017 $ $

Grants owing 1 April 2,604,703 1,636,796 Grants approved during year 2,276,990 3,905,717 4,881,693 5,542,513 Grants paid during year - current period (527,690) (1,684,572) - prior periods (973,131) (1,028,451) (1,500,821) (2,713,023) Grant adjustments (73,330) (224,787) Total grants approved not paid $3,307,542 $2,604,703 as at 31 March

(2) CASH AT BANK

2018 2017 $ $

ANZ Bank cheque account 8,154 925 ANZ Bank deposit (on call) 1,063,386 342,040 ASB Bank deposit (on call) 435 424 Craigs Investment Partners accounts Craigs Investment Partners AUD call account 827,481 509,286 Craigs Investment Partners GBP call account 1,834 2,912 Craigs Investment Partners NZD call account 962,640 669,475 Craigs Investment Partners USD call account 12,052 19,558 Total Craigs Investment Partners accounts 1,804,007 1,201,231 $2,875,982 $1,544,620

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.

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

(3) SHARES AND SECURITIES

The Trust holds the following interests in publicly listed companies (at market value):

2018 2017 $ $

New Zealand Equities 16,295,215 14,567,324 Australian Equities 7,015,779 6,577,966 European Equities 312,351 - United Kingdom Equities 998,914 862,236 United States of America Equities 9,029,332 7,495,802 Fixed Interest Securities 29,676,578 31,072,717 Property Investments 1,229,014 885,750 Total Investments $64,557,183 $61,461,795

Investment portfolio as at beginning of year 61,461,795 59,695,437 Maturities and realisation proceeds (16,037,107) (11,529,245) Reinvestments (at cost) 15,260,070 11,840,324 Realised profit on disposal of investments 1,354,721 310,496 Realised loss on disposal of investments (389,044) (776,878) 188,640 (115,303) 61,650,435 59,540,134

Unrealised gain/(loss) 2,906,748 1,921,661 Total Investments $64,557,183 $61,461,795

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

(4) TAXATION

2018 2017 $ $

Taxation Reconciliation

Operating Surplus before distributions 2,148,531 2,362,585 Permanent Differences Adjustment for tax treatment of investment income 294,812 138,446 Imputation credits received 177,944 172,146 Non deductible expenditure 147,982 143,192 Taxable income available for distribution 2,769,269 2,816,369 Income distributed as beneficiary income (2,082,948) (2,294,714) Taxation losses utilised (86,819) - Net taxable income $599,502 $521,655

Taxation at 33% 197,835 172,146 Imputation credits utilised (159,415) (143,496) Taxation charge for the year $38,420 $28,650

Taxation Payable

Taxation charge for year 38,420 28,650 Taxation paid on foreign income (38,908) (41,465) Taxation distributed to beneficiaries 488 12,815 2016 taxation refund not yet received - (5,012) Taxation payable / (refundable) - ($5,012)

As at 31 March 2018 unutilised imputation credits of $18,529 (2017: $28,650) were converted to a loss of $56,147 (2017: $86,819). This loss is available to be applied against future taxable income.

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

(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 2018 the commitment to future scholarships is as follows:

2018 2017 $ $

2018 - 37,000 2019 55,000 20,000 2020 29,000 - $84,000 $57,000

Grants

The Trust has agreed to make allocations from future income to approved entities subject to all relevant criteria being meet. At 31 March 2018 future income allocations were as follows:

2018 - 307,000 2019 361,000 - 2020 - 2023 105,000 2024 - 2028 150,000 $616,000 $307,000

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 2018 funding of $500,000 (2017: $300,000) had been identified and allocated, payments at balance date total $300,000 (2017: $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 and is anticipated to begin subsequent to the building being completed in the coming financial year. to the Financial Statemento the Financial Statements

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

(6) COMMITMENTS (continued)

The Trustees agreed to make $30,000 per annum available towards the costs of the Manfeild NZ Grand Prix for a period of three years. The first Grand Prix took place during the financial year and the final commitment remaining totals $60,000.

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 2018 a total of $224,980 (2017: $199,970) 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.

(7) STATEMENT OF CONTINGENT LIABILITIES

There are no contingent liabilities in this reporting period (2017: 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.

2018

G M C May Ross Intermediate

R J Titcombe Winchester School Rotary Club of Makino Beef Expo Manfeild Park Trust

P T Askey The Rugby Museum of NZ Manfeild Park Trust

R J Wong NZ Chinese Association Eden Kindergarten Awapuni Rotary

R M Karaitiana The Bio Commerce Centre (via Manawatu Bio Commerce Trust)

Notes to the Financial Statements

FOR THE YEAR ENDED 31 MARCH 2018

(8) RELATED PARTY TRANSACTIONS (continued)

2017

G M C May Globe Theatre Trust Manawatu Community Housing Trust

R J Titcombe Manfeild Park Trust

P T Askey Manawatu Rugby Union Ruahine Kindergarten Association Wildbase Recovery Project

R J Wong Wildbase Recovery Project

(9) MANAWATU HEALTHY HOMES LIMITED

On 25 May 2006 Manawatu Healthy Homes Ltd was incorporated.

Central Energy Trust owns 100% of the shares. R W Eglinton and P A Askey are listed as Directors.

Manawatu Healthy Homes Limited was formed purposely for the distribution of funds to the Manawatu Healthy Homes Project. This project aims to install insulation into homes in the Manawatu, specifically for those in the community which are most at need.

The Manawatu Healthy Homes Limited accounts have not been consolidated as they have no material effect.

2018 2017

$ $

Interest received - 1 Net profit/(loss) - 1

Retained Earnings at beginning of the year 435 434 Current year profit/(loss) - 1 Retained earnings end of the year 435 435

Represented by: ANZ Bank cheque account 435 435