2017 Annual Report
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DEVELOPMENT WEST COAST GROUP ANNUAL REPORT | 2017 Regional Investment 2001 - 2017 FINANCIAL OVERVIEW COMMUNITY DISTRIBUTIONS & PROJECTS Net Profit Extraordinary Distribution Fund $23.2m $6.0m A ONE OFF DISTRIBUTION OF $2M TO EACH OF THE THREE Total Equity DISTRICT COUNCILS FOR COMMUNITY ASSETS Cycleway Funding $117.7m $1.5m Total Assets TWO GRANTS OF $750K TO THE WESTLAND WILDERNESS TRAIL AND THE OLD GHOST ROAD $129.2m Major District Initiative Operating Expenses $20.1m $6.7M COMMITMENT TO EACH OF THE 3 DISTRICTS TO DEVELOP SIGNIFICANT COMMUNITY ASSETS $36.9m District Economic Stimulus Fund Income $3.0m A DISTRIBUTION OF $1M TO THE 3 DISTRICTS TO STIMULATE THE LOCAL ECONOMIES THROUGH DIRECT $137.0m ASSISTANCE TO BUSINESSES AND ORGANISATIONS Tourism Major Regional Initiative $2.3m COMMERCIAL DWC’S FUNDING LEVERAGED FURTHER INVESTMENT OF DISTRIBUTIONS $5M IN 21 DIFFERENT TOURISM RELATED PROJECTS Digital Enablement Fund 295 Applications RECEIVED $1.0M AN ALLOCATION OF $1M WAS MADE TO LEVERAGE $291.0m FURTHER GOVERNMENT FUNDING AVAILABLE TO IMPROVE TELECOMMUNICATIONS ON THE COAST One Off Grant to Councils 191 Distributions APPROVED $1.5m $500K GRANTED TO EACH OF THE 3 DISTRICT COUNCILS $122.0m FOR INVESTMENT IN COMMUNITY ASSETS Grants & Projects 137 Distributions MADE $25.0m A SIGNIFICANT NUMBER OF REGIONAL ECONOMIC AND $84.4m COMMUNITY DEVELOPMENT PROJECTS HAVE BEEN FUNDED BY DWC Total $60.4m ANNUAL REPORT 2017 DEVELOPMENT WEST COAST I Purpose EMPLOYMENT OPPORTUNITIES & ECONOMIC BENEFITS To promote sustainable employment opportunities and/or generate sustainable economic benefits for the West Coast region. Vision TO PROSPER DWC’s actions directly contribute to the success and wealth of the West Coast region. Core Values A LEADER IN ALL THAT WE DO » Open Communicator – internal and external » Entrepreneurial Spirit – passionate, optimistic, creative, Innovative, motivational, calculated risk taker and take action/ execute » Empower others » Proactive and responsive » Consistent decision making » Own our strategy – don’t veer from our priorities STRATEGIC PRIORITIES Priority 1: Here for the Benefit of Current and Future West Coasters • Protect DWC’s charitable status. • Ensure DWC has the funds available to invest into the region through the maintenance of DWC’s equity position in real terms. Priority 2: Development of Business and Industry on the West Coast • Make sound commercial distributions. • Invest in research, development and feasibility to identify opportunities to diversify, develop and create business and industry on the West Coast. • Build the commercial capability and leadership of West Coast businesses to empower and assist them in growing, diversifying, developing and being sustainable. • Facilitate business networking opportunities. Priority 3: Improve the Profile and Visibility of the West Coast • Be a key influencer and partner in the development of the West Coast region. • Be proactive and responsive to the West Coast’s changing economic climate and the external factors affecting West Coast business and industry. Lake Matheson and Aoraki / Mt. Cook and Aoraki Matheson Lake Key Numbers & Highlights 2017 Group DWC (Consolidated) (Parent) 2016–17 2015–16 2016–17 2015–16 ($m) ($m) ($m) ($m) TOTAL REVENUE (INCLUDING MARK-TO- MARKET UNREALISED 14.1 9.5 10.5 9.2 GAINS/LOSSES)* TOTAL OPERATING EXPENSES* 6.3 2.5 2.3 2.3 COMMUNITY DISTRIBUTIONS & PROJECTS 1.7 5.8 1.7 5.8 PROFIT/(LOSS) 5.6 (1.0) 5.3 (0.3) TOTAL ASSETS 146.8 127.0 129.2 127.3 TOTAL EQUITY 118.7 110.8 117.7 111.7 * Group results now include the operation of Cranley Farms Ltd from 1 August 2016 ANNUAL REPORT 2017 DEVELOPMENT WEST COAST III Contents Regional Investment 2001 - 2017 i Key Numbers & Highlights 2017 iii Directory v Regional Economy Overview vi Regional Growth Study 1 Chair’s Report 2 Investment Fund 3 Trustees 4 Chief Executive’s Report 6 Business Support 8 Industry Support & Regional Development 17 Community Support 20 Statement of Responsibility 23 Audit Report 24 Consolidated Statement of Comprehensive Revenue and Expense 26 Consolidated Statement of Changes in Equity 27 Consolidated Statement of Financial Position 28 Consolidated Statement of Cashflows 29 Notes to the Financial Statements 30 IV ANNUAL REPORT 2017 DEVELOPMENT WEST COAST Directory Trustees Rooney, Renee CHAIR ELECTED – GREY DISTRICT Mulligan, Patrick DEPUTY CHAIR, INDEPENDENT - NEW ZEALAND LAW SOCIETY CHAIR – INVESTMENT COMMITTEE Lockington, Mark CHAIR - FINANCE & AUDIT COMMITTEE INDEPENDENT – CHARTERED ACCOUNTANTS AUSTRALIA & NEW ZEALAND Christie, Julie DNZM COUNCIL APPOINTEE Little, Hugh ELECTED – WESTLAND DISTRICT Oldham, Brent ELECTED – BULLER DISTRICT Tumahai, Francois TANGATA WHENUA TRUSTEE Past Trustees Buchanan, Robert (TO 31 JULY 2016) Dooley, Frank (TO 24 OCTOBER 2016) Smith, Colin (TO 24 OCTOBER 2016) Sturgeon, John (Past Chair) (TO 30 JUNE 2017) Staff Mackenzie, Chris CHIEF EXECUTIVE Coates, Tara ADMINISTRATION MANAGER Dawson, Mark CHIEF FINANCIAL OFFICER Gibb, Sharon COMMERCIAL LENDING MANAGER Gibbens, Alexia ADMINISTRATION ASSISTANT Gilbertson, Warren CHIEF OPERATING OFFICER Hill, Fiona BUSINESS SERVICES MANAGER Johnston, Debbie ACCOUNTANT Lunn, Belinda EXECUTIVE MANAGER Sara, Bridgette PROJECT ADMINISTRATOR Wilson, Helen RESEARCH & INNOVATION MANAGER Advisory Body Rushbrook, Keith CHAIR Bestwick, Jenn Steele, David Registered Office 1st Floor, Brunner House, 54 Tainui Street, Greymouth P O Box 451, Greymouth Advisors Investment BANCORP TREASURY SERVICES LTD JBWERE (NZ) LTD Legal BUDDLE FINDLAY DUNCAN COTTERILL HANNAN & SEDDON Tax KPMG Bankers Westpac Auditors Audit New Zealand ON BEHALF OF THE CONTROLLER AND AUDITOR-GENERAL ISSN 1178-3338 (print) ISSN 1178-3346 (online) ANNUAL REPORT 2017 DEVELOPMENT WEST COAST V Regional Economy Overview THE West Coast’s economy has been affected by commodity price fluctuations and the region’s leaders are working hard to identify new opportunities. The region is exploring ways to add value to the traditional sectors and build a business environment that attracts investment and talent. Consumer confidence has improved in the last year with annual growth in the retail sector healthy at 12%. Over the last three years GDP has declined by 4.1% and employment has decreased by over 900 jobs. Self-employed workers accounted for 19.9% of the workforce in the West Coast region in 2016, above the national rate of 18.0%. GDP per employee in the region measured $98,444 in the year to March 2016 – 4.1% higher than the national figure. The largest advance in GDP was seen in the tourism sector with 11% GDP growth, significantly higher than the 7% recorded nationwide. Tourism contributed $111m towards GDP in the region in 2016 amounting to 6.8% of the West Coast region’s economic output in 2016. There was an increase of $77m in total visitor spending in the region between 2015 and 2017. The minerals sector continues to make a major contribution to the value-added and employment figures on the West Coast and provides good incomes. Manufacturing made the largest contribution to employment growth in the region between 2015 and 2016 with the industry adding 102 jobs. Agriculture, Forestry and Fishing provided 2,000 jobs and accounted for 12.0% of total employment in the region. By contrast, this industry accounted for 6.2% of total employment in New Zealand. STATISTICS HAVE BEEN SOURCED FROM West Coast Region Annual Economic Profile 2016 (Infometrics) and MBIE’s tourism statistics. Population Tourism Spending 32,600 + 12.7% GDP Business Units 2015 - 16 $1.64 billion 3,753 Mean Annual Earnings $52,800 VI ANNUAL REPORT 2017 DEVELOPMENT WEST COAST Regional Growth Study ON 13 July 2017, the final report of the Regional Growth Study was published. The report had been commissioned by the Government into the delivery of Economic Development on the West Coast. This report is part of the Government’s Regional Growth Programme to “identify economic challenges and opportunities, and help increase jobs, income and investment for New Zealand in the regions.”1 For the West Coast, this means a variety of initiatives with the intention of “growing the West Coast visitor economy, making it easier to invest and do business, supporting economic diversification and improving connectivity and infrastructure.”2 The Action Plan details the initiatives, which range from growing the digital economy and future proofing Franz Josef, to recommending the development of a Regional Economic Strategy and a single unit within DWC which will deliver economic development and the action plan. “Development West Coast will have overall responsibility for the implementation/ delivery of the projects, although responsibility for the implementation of individual initiatives will rest with the lead regional/central government entity for each initiative.”3 Changes will be implemented as soon as realistically possible and the community will be kept informed of these changes. 1 The Regional Growth Programme MBIE and MPI 2 Hon Simon Bridges Media Statement 13 July 2017 3 West Coast Economic Development Action Plan 2017 ANNUAL REPORT 2017 DEVELOPMENT WEST COAST 1 Investment Fund STATEMENT OF INVESTMENT POLICY & OBJECTIVES (SIPO) THE broad investment objectives for DWC’s Investment Fund are to achieve a level of income which is needed to meet the distribution requirements of DWC in any one-year and to provide for a reasonable element of capital growth. This is required to preserve the real value of the Trust Fund thereby enabling increased distribution levels over time. More specifically,