CENTREPORT LIMITED AND SUBSIDIARIES

STATEMENT OF CORPORATE INTENT

FOR FINANCIAL YEARS ENDED 30 JUNE 2021 TO 2023

Contents 1 INTRODUCTION...... 3 2 STRATEGIC PRIORITIES ...... 4 3 OUR PURPOSE ...... 5 3.1 People ...... 6 3.2 Environment ...... 7 3.3 Customer ...... 10 3.4 Investment ...... 10 3.5 Stakeholders & Community ...... 11 4 PERFORMANCE TARGETS/OBJECTIVES ...... 13 4.1 People ...... 13 4.2 Environment ...... 14 4.3 Customer ...... 15 4.4 Investment ...... 16 4.5 Stakeholders & Community ...... 18 5 GOVERNANCE ...... 20 6 RATIO OF SHAREHOLDERS FUNDS TO TOTAL ASSETS ...... 22 7 ACCOUNTING POLICIES ...... 22 8 DISTRIBUTION OF PROFITS TO SHAREHOLDERS ...... 22 9 INFORMATION TO BE REPORTED ...... 23 10 PROCEDURES FOR ACQUISITION OF SHARES ...... 24 11 COMPENSATORY ACTIVITIES ...... 24 12 VALUE OF SHAREHOLDER INVESTMENT ...... 24 13 OTHER AREAS ...... 24 APPENDIX 1 FINANCIAL TARGET KEY TERMS ...... 26

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1 INTRODUCTION CentrePort Limited (CentrePort or the Company) is a port company under the Port Companies Act 1998 and is incorporated under the Companies Act 1993. This Statement of Corporate Intent (SCI) has been prepared in accordance with the requirements of section 9 of the Port Companies Act 1988. CentrePort Limited is 76.92 percent owned by Greater Regional Council (via its subsidiaries WRC Holdings Ltd and Port Investments Ltd) and 23.08 percent by Horizons Regional Council (via MWRC Holdings Limited). The purpose of the SCI is to set out the Board’s objectives for CentrePort and its subsidiaries (the CentrePort Group) for the year commencing 1 July 2020 and the following two financial years.

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2 STRATEGIC PRIORITIES CentrePort’s key strategic priorities over the next three years are to: • Build resilience and regenerate the port – Apply lessons from the 14 November 2016 earthquake to build appropriate, fit-for-purpose assets to achieve our strategic objectives. – Work collaboratively with the Greater Wellington Regional Council, Transport Agency, , interisland operators Strait NZ Bluebridge and Interislander, along and other key stakeholders on the potential for a multi-modal, integrated tourism, transport and ferry terminal in Wellington. – Continue to investigate infrastructure needed for the port to fulfil its role as a service provider for the central region. • Grow freight capacity – Work with shipping lines and customers to grow freight exchanges at the port. – Develop the inland hub model to support efficient and sustainable movement of cargo. • Strengthen relationships by working collaboratively with key stakeholders to provide a foundation for the CentrePort Regeneration Plan. These strategic priorities are designed to regenerate property and assets, ensure resilience is built into the business, and facilitate growth to ensure CentrePort reaches its full potential as a regional asset for the central New Zealand economy. Achieving the priorities may be challenging. Risks include the ability to secure additional shipping services and access to the resources needed to progress the regeneration of the port infrastructure. Nevertheless, CentrePort closely monitors these risks and will make tactical adjustments where necessary to deliver to the strategic priorities.

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3 OUR PURPOSE CentrePort is at the heart of New Zealand’s freight and transport system and is a key strategic asset for central New Zealand. It facilitates economic growth and trade throughout the region. Ensuring our business is sustainable and recognising our part in the guardianship of Wellington Harbour (Te Whanganui a Tara) are major drivers for our activities and will continue to be as CentrePort looks to the future in its Regeneration Plan. CentrePort’s Regeneration Plan is central to the way we conduct our business. We aim to deliver a 21st century logistics asset that benefits the economy and connects with the city and the region. The finalisation of our insurance claim for damage sustained following the 2016 Kaikoura earthquake occurred October 2019. The final port infrastructure claim with insurers was for $472.5 million, net of deductibles. Adding the earlier finalised Commercial Property portfolio and Coldstore claims, the combined amount totals $667.2 million, net of deductibles. The finalisation of the insurance claim gives CentrePort assurance that it can proceed with the Regeneration Plan. The plan and operations are aligned with our wider business objectives and Sustainable Development Goals and will ensure CentrePort is sustainable for the wider community. Covid-19 Response CentrePort is classified as an essential service provider and continued to operate during the covid-19 level 4 lockdown imposed by the 26 March 2020. However some of CentrePort’s trades were classified as non-essential services and were suspended during lockdown. The 2019/2020 cruise season finished early and log exports have been significantly impacted by the covid-19 lockdown. The pandemic’s long term impact on CentrePort is constantly developing. CentrePort’s response is also constantly developing to ensure the Port’s financial viability in the short term, while also planning for the future. In the short term CentrePort will have an increased focus on cash management and implementing cost saving initiatives. Longer term the Port will ensure it is well placed for trade growth by prioritising projects which lowers operating costs and improves operating efficiency. Alignment with Sustainable Development Goals Our work and overarching strategy for the Regeneration Plan is aligned with the United Nations Sustainable Development Goals (UN SDGs). The UN SDGs have been adopted by the New Zealand Government, and by the World Ports Sustainability Program, which aims to empower ports worldwide to create sustainable added value for communities and the wider regions where their respective ports are located. CentrePort has reviewed the UN SDGs and applied these as they relate to the port, guded by five initial themes. These are incorporated as part of its day-to-day operations and within the Regeneration Plan. Key initiatives are linked to the outcomes sought within the five themes: • People • Environment • Customer • Investment • Stakeholders & Community

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CentrePort’s activity fits within these five pillars and underpins all future work. The full details of all initiatives remain in development.

People Environment Customer Investment Stakeholders & Community

• Safety & • Harbour • Trade flows • Infrastructure • Urban Wellbeing biodiversity • Trade growth & resilience integration • Leadership • Port integration diversity • Integrated • Relationships • Diversity • Climate and • Performance networks • Lifelines • Employment energy • Supply chains • Technology and • Harbour • Waste • Employment innovation • Heritage • Environmental • Inland strategy • Cultural impacts

3.1 People At CentrePort we recognise that our people are central to the success of our business. Our emphasis remains on building the capacity, culture, performance and capability of our people and providing all employees with a rewarding career. Safety and Wellbeing Health and Safety is the key priority for CentrePort. Our people have been leading this culture, and our 23 health and safety representatives continue to benefit from investment in their training. We have made a significant investment of time and resources in reporting, training and improvements to health and safety processes. The bSafe reporting system has been driving innovation and improvement in ways of working, and we will continue to use this to gather a greater quality of reporting and problem solving from the front line. CentrePort aspires to continue to achieve the zero rate of lost time to injuries. Our performance targets are for zero harm, and we will provide regular updates on our performance compared to other port operations. Leadership and Diversity Leadership plays a crucial role in achieving our vision, strategy and values. This involves not just leadership as defined by formal roles, but leadership as a quality in all of our people. CentrePort will continue to provide workplace opportunities and skills enhancement for our employees. Our ‘Leadership Approach’, with supporting behaviours, has been developed and we are now on the journey of implementing and embedding it in the organisation. Our Leadership Approach outlines the behaviours expected of leaders at CentrePort: adapt, empower, inspire, engage and take ownership. CentrePort’s leadership development programme targets individual leaders as well as facilitating group development programmes. The current emphasis regarding group development is on our Future Leaders’ Programme. There are currently two programmes underway with 27 participants from across the business. We aim to attract a diverse and inclusive workforce with a range of skills and experience to have well- rounded, engaged and high performing employees. Our focus is on cultural diversity, with a specific focus on mana whenua opportunities.

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CentrePort’s Gender Split Male Female

All CentrePort Employees 83% 17%

Management (including all people managers) 89% 11%

Board 50% 50%

CentrePort’s Ethnicity^

New Zealand European 52%

Maori 12%

Samoan, Tongan, Fijian, Cook Islander & Niuean 8%

British, Irish and European 16%

Other 13%

^ The ethnicity was captured in the demographic section of the last employee engagement survey. It is important to note that the data relies on employees selecting the correct ethnicity. As the survey participation was confidential there is no way to check the accuracy of these numbers. Employment Our employees are central to the continuing success of CentrePort’s business. We are a responsible employer and strive to empower our people. The implementation of a fixed flexi-rostering system last year means frontline staff now rotate between more business areas. This has resulted in increased training so our employees can grow their skills. The training is New Zealand Qualifications Authority approved, providing employees with externally recognised qualifications. We remain focused on supporting employees and managers in pursuit of a culture of high engagement and performance. Key initiatives have included our employee recognition programme and the refresh of our Values.

3.2 Environment CentrePort is committed to operating the port in an environmentally sustainable manner. A rigorous environmental control programme is in place for all port activities, including demolition and remediation works. Harbour biodiversity As a major user of Wellington Harbour (Te Whanganui a Tara) we recognise we have an important role to play in helping to protect and enhance harbour biodiversity. We intend to focus on improving storm water quality and enhancing Kaiwharawhara Estuary, as well as looking for opportunities to partner with mana whenua iwi and the harbour community to support broader initiatives. We are consistently looking at ways we can improve the environment of the Port with the objective to leave Wellington Harbour in the same or better condition than we found it. Port integration As a city port we will ensure we continue to be a good neighbour. We will work to make a positive contribution to the towns, cities and communities within which we operate.

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This includes Wellington city, as well as our inland hubs in Whanganui, New Plymouth, Manawatu and the Wairarapa. Climate and energy We are committed to environmental sustainability and ensuring we minimize greenhouse gas emissions. We will transition to low carbon energy sources in our operations while enhancing the security of energy supplies to the port that underpin our services to customers. A range of carbon reduction activities are being implemented and further reduction opportunities are being explored. We will be enhancing electric mobile facilities for container handling which will be introduced from mid-2020. We are investigating other opportunities to reduce diesel consumption. We will also continue our efforts to transfer freight from road to rail using CentreRail to support our customers make the transition to lower carbon transport. With respect to adaptation to climate change risks (e.g. coastal inundation and erosion due to sea level rise and increased storm frequency and severity) a preliminary natural hazards assessment has been undertaken as part of the port regeneration programme. The next steps are to undertake more specific assessments of assets (e.g. seawalls) and a more in-depth study of specific hazards, risks and adaptation strategies to be applied to infrastructure projects. Waste We will continue our successful efforts to minimize landfill waste from construction and demolition. CentrePort’s Waste Minimisation Project began in 2017, and will continue to help CentrePort’s goal to be a zero-waste port. This means we will recycle all waste concrete and asphalt from the various demolition sites. To date more than 27,000 tonnes of concrete and asphalt has been diverted for reuse on the port, while other waste streams such as steel and other building materials have been recycled or reused elsewhere. We have expanded this programme to accept third party materials, and will continue to work with Wellington City Council and other suppliers to enable the efficient reuse of waste material from across the region, avoiding unnecessary use of natural resources and reducing greenhouse gas emissions. Environmental impacts CentrePort is committed to environmental sustainability. This is a key element of the regeneration plan for the port. Our environmental approach is guided by the Board’s Health, Safety and Environment sub-committee that meets quarterly, an internal sustainability committee and three meetings annually of the Environmental Consultative Committee, which includes representatives from community groups, the Greater Wellington Regional Council and the Wellington City Council. In 2019, our environmental management system gained 'EnviroMark Gold' accreditation (now Toitū Envirocare Gold) and we intend to achieve 'Toitū Envirocare Diamond' standard (ISO14001:2015 equivalent) over the next two years. CPL’s Greenhouse Gas Emissions Inventory for FY19 has been provided to GWRC for audit and reporting purposes and is shown below. An emissions management plan will be developed in FY21 forming part of CentrePort's regeneration plan. The plan will set emission reduction targets to achieve carbon neutrality and identify key supporting initiatives such as energy efficiency and transitioning to low carbon renewable energy (e.g. replacement of diesel powered vehicles, plant and machinery with electric which is already underway). The plan will include climate adaptation strategies, and performance indicators.

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Carbon Inventory for Period 1 July 2018 to 30 June 2019

Emission Source Consumption Amount Emission Factor Tonnes CO2 - FY2018 Units (CO2e) – MfE, May equivalent 2019

Scope 1

Regular petrol Litre 9,507 0.00245 22 24

Premium petrol (95) Litre 0.00245 0 0

Premium petrol (98) Litre 0.00245 0 0

Diesel (fuel card and bulk) Litre 827,283 0.00269 2,225 1,823

Diesel (AGO marine supply) Litre 612,385 0.00269 1,647 1,660

Scope 2

Purchased electricity kwh 3,789,268 0.0000977 370 513

Scope 3

Transmission and distribution kwh 3,789,268 0.0000072 28 42 losses for all purchased electricity

Domestic air travel pkm 164,571 47

International air travel (short) pkm 39,304 7

International air travel (long) pkm 114,246 29

Taxi travel km 6,519.20 0.000224 1

Rental car km 13,571 0.000207 3

Total Tonnes 4,380 4,062

Intensity

TEU 93,846 95,136

Total Emissions/TEU 0.046 0.037

CPL has sought shareholder approval to enter into a $15m debt facility with New Zealand Green Investment Finance Ltd (NZGIF) to progress investment into sustainable activities. NZGIF is a green investment bank established with the purpose of accelerating investment to lower greenhouse gas emissions activities in New Zealand. An initial drawdown is planned to meet the cost of electric terminal tractors.

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3.3 Customer CentrePort recognises our strong relationships and support from our customers and will continue providing productive and efficient connectivity and operations for our customers. Trade growth & diversity Our trades are predominantly logs, containers, and fuel, cruise and other bulk. As part of facilitating trade and connecting the Lower North Island to global markets, CentrePort will ensure it is invested in relationships with our customers to understand their needs and ensure we can optimise the flow and growth of trade. Performance CentrePort’s operational performance continues to improve after the effects of the 2016 Earthquake. As a result of improved productivity, growing volumes of bulk cargo and containers are being handled. A strong focus on improving our operational outcomes is delivering an enhanced Health and Safety environment, which will further improve productivity and help us to look for safer and better ways of performing operations. Supply chains We are consistently striving to improve supply chain efficiency to provide our customers with greater efficiency and certainty of pricing and capacity. We will work with our partners on expanding the CentreRail service to improve the offering, frequency and efficiency. Our partnerships will be critical to delivering this. CentrePort’s investment into regional hubs is providing customers with improved connectivity to markets and greater certainty around price. Information about the Inland Strategy is included below under the “Investment” pillar. Employment Our role as an employer in the region incorporates not only our direct employees and persons conducting a business or undertaking (PCBUs), but also the wider employment opportunities created through CentrePort and its operations. CentrePort will continue to indirectly support the broader local economy through its activities across the region. This includes the Inland Strategy that provides local businesses with the opportunity to grow their operations and employment, facilitated through CentrePort’s services.

3.4 Investment Investing in our infrastructure, services and connectivity will enable CentrePort to continue meeting growing demands and enhance our services. Infrastructure resilience Our medium-term operating plan is focused on our key enablers for regeneration. CentrePort is working on our plan to better serve future needs and build the resilience of critical assets. A key component of the medium-term operating plan is also the demolition programme with 17 structures removed to date. Works to deconstruct and remove the former BNZ building commenced in mid-2019. Removal of damaged and redundant structures improves land utilisation by continuing to make additional land available to allow for permanent regeneration works.

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Core regeneration initiatives and developments include upgrading infrastructure assets to support future resilience. Identified projects include the cranes, Aotea Quay, Kings Wharf, the Interislander Ferry operation, and the Seaview and Burnham Wharves. CentrePort will continue to engage with its shareholders, customers and other stakeholders to inform this work and the long-term Regeneration Plan. Integrated networks CentrePort is leading the way in the New Zealand supply chain with its integrated systems. Our strong partnerships with AliArc and KiwiRail in Whanganui and New Plymouth, and an integrated transport solution at Waingawa in the Wairarapa, is helping move logs and containers seamlessly to and from the Port. The increased use of rail and efficient networks has social, environmental and economic savings and benefits to customers and the wider community. Technology and innovation CentrePort is continually investing in technology and innovation to ensure the port keeps pace with technology and is utilising technology to work in the most efficient way. Inland strategy The CentreRail service links CentrePort’s inland hubs in Whanganui, Taranaki, Manawatu and the Wairarapa. In partnership with KiwiRail, the inland hubs utilise long-haul rail transport to the port from key aggregation points. This improves efficiencies in logistics, creating a reliable, sustainable connection from these sites to the world. CentrePort is looking at partnerships and expanding the capacity at existing sites. As demand increases we will expand our services and utilise rail for this where possible. CentrePort is investigating the expansion of the capacity and range of the network in existing and new areas in the region for the benefit of exporters and importers in the central North Island. Plans for potential new sites for regional hubs are underway and will progress over the next three years.

3.5 Stakeholders & Community CentrePort recognises it is part of the wider region and has a role in working with stakeholders and the community. Urban integration Connecting CentrePort to the wider Wellington city is essential to our business. For CentrePort, one of our key objectives is to optimise the port and its place on Wellington’s waterfront and in the broader city. Urban integration constitutes a crucial part of port development and work going forward, as part of our Regeneration Plan. We have been working with international consultants Royal Haskoning DHV on inner harbour work and urban integration. This includes optimising the way visitors flow through the port from the ferries and cruise ships. Improved berth arrangements will enhance the experience of visitors to the port and allow visitors to connect to Wellington city more efficiently.

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Relationships Our relationships are essential to the work we do at CentrePort. Our consultation process helps us gain valuable insights from a wide range of stakeholders including customers, the community, local and central government. Our relationship with mana whenua iwi is of vital importance to CentrePort. Two iwi have authority with respect to Wellington city and harbour – Te Atiawa/Taranaki Whanui ki te Upoko o Te Ika and Te Runanga o Toa Rangatiri (Ngati Toa). In FY21 we will actively develop our relationships with these iwi respectively to co-design pathways to further develop partnership based relations. We are looking to re-establish quarterly CE level meetings to discuss and enable alignment on strategic issues and relationship management; as well as regular steering group meetings for major projects. We intend that all meetings be minuted and the effectiveness of this engagement be reviewed with iwi on a regular basis. Relationships with other regional iwi will also be developed. These iwi include Ngati Kahungunu ki Wairarapa and Rangitane o Manawatu which are located in areas where CentrePort operates regional hubs. Lifelines CentrePort also plays a key role in the provision of New Zealand’s Lifelines network. In the event of an emergency, fuel facilitated through CentrePort assets would be essential to supply rescue equipment in the immediate response. In an earthquake, ferries would also play an important part in the response, as a key supply chain due to the expected loss of roading. The Wellington Region Emergency Management Office (WREMO) is developing a resilience plan for Wellington in the event of an emergency. Central government, through the Ministry of Civil Defence and Emergency Management is preparing a national level response plan. CentrePort participates in the WREMO and national work, including running workshops on being more proactive and planning reviews. Harbour CentrePort is one of the many users of Wellington Harbour (Te Whanganui a Tara), and we intend to enhance engagement with the harbour community to identify opportunities for positive environmental and social outcomes. This includes actively supporting community-based initiatives to promote the conservation and enhancement of the harbour, or other research, education, or recreation focussed programmes. Heritage and Cultural As the port has been a significant feature in the development of Wellington for over 150 years, we intend to work with the community to identify opportunities to recognize, respect and where possible protect this heritage. This includes engagement with the community on heritage structures such as the Interisland Wharf and Miramar Wharf. Through partnership-based relationships with mana whenua iwi we intend to better integrate Māori culture and perspectives into our business at all levels.

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4 PERFORMANCE TARGETS/OBJECTIVES Our performance targets and objectives are aligned with the five themes as outlined above. We are actively working on developing these targets alongside the Regeneration Plan, with a view to revise the targets as the work progresses.

4.1 People

Objective Performance Measure Performance Target

FY21 FY22 FY23

Create a Lost Time Injury Frequency (per 200,000 hours ≤ 3.2 ≤ 3.2 ≤ 3.0 zero harm worked) workplace FY20 Target ≤ 3.5 FY20 Q3 report = 3.37

Lost Time Injury Severity (per 200,000 hours ≤ 8 ≤ 8 ≤ 6 worked) FY20 Target ≤ 10 FY20 Q3 report = 6.38

bSafe Reports (incident and near miss reports) > 1,000 > 1,000 > 1,000 FY20 Target >900 p.a FY20 Q3 YTD = 888

Site Inspections > 120 > 120 > 120 FY20 Target >120 p.a. FY20 Q3 YTD = 174

Safety Interactions > 120 > 120 > 120 FY20 Target >120 p.a. FY20 Q3 YTD = 199

Random Drug and Alcohol Testing (as a percentage > 40% > 40% > 40% of total employees) FY20 Target >40% FY20 Q3 report = achieved

Comply with the AS/NZS 4801: Occupational Health Compliance Compliance Compliance and Safety Management Systems as per AS/NZS with AS/NZS with AS/NZS with AS/NZS 4801 audit 4801 4801 4801 FY20 Target is compliance FY20 Q3 report = compliance

Policy reviewed annually against CentrePort’s Compliance Compliance Compliance objectives and external benchmarks with Policy with Policy with Policy FY20 Target is compliance FY20 Q3 report = compliance

Being a Conduct annual employee engagement survey and Engagement Engagement Engagement respected follow up actions survey survey survey and FY20 Target is conduct annual survey conducted. conducted. conducted. responsible FY20 survey was conducted employer

Key indicator

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4.2 Environment

Objective Performance Measure Performance Target

FY21 FY22 FY23

Minimise impact on Environmental Maintain Toitū Maintain Toitū Achieve Toitū Envirocare the environment Management System Envirocare Envirocare Gold Diamond status FY20 Q3 report = Gold status status EnviroMark Gold level (Formerly achieved EnviroMark)

System: consistency with Audit and third Full ISO14001 ISO14001 stage compliance N/A FY20 Target Audit and certification second stage complete certification FY20 Q3 report = development of EMS to next stage underway

Complaints: number of Zero Zero complaints from external stakeholders about Zero environmental performance FY20 Target = Zero FY20 YTD = 4

Solid waste to landfill Waste Waste Waste minimization (quantity) including the minimization minimization integrated into potential for third party integrated into integrated into Regeneration waste Regeneration Regeneration FY20 Q3 report = BNZ demolition waste reduction continuing. Receiving waste from external sites.

Greenhouse gas Develop an Meet targets Meet targets identified in emissions (quantity Emissions identified in Emissions Management CO2equivalent) Management Emissions Plan Emissions measured in Plan to support Management Plan Operate in a accordance with ISO GWRC’s goal to sustainable manner 14064 –1:2006 and the be carbon Greenhouse Gas Protocol neutral by FY20 Q3 report = low 2030 emission vehicle projects and energy efficiency programme progressed

Ensure regulatory Compliance breaches Zero Zero Zero compliance FY20 Target is zero FY20 Q3 report = zero

Key indicator

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4.3 Customer

Objective Performance Measure Performance Target

FY21 FY22 FY23

Maintain compliance Compliance is Compliance Compliance Compliance with the International maintained, all incidents maintained as per maintained as per maintained as per Ship & Port Security are reported to MNZ and annual audit annual audit annual audit (ISPS) Code NZ Customs Service, and learning reviews are undertaken and recommendations implemented FY20 Target is compliance maintained per annual audit FY20 Q3 report = compliance

Maintain compliance The requirements of the No breaches of the No breaches of the No breaches of the with the Port & PHSC continue to be PHSC PHSC PHSC Harbour Safety Code met. (PHSC) Risk assessments of new tasks or reviews post All new task risk All new task risk All new task risk incident completed. assessments and assessments and assessments and FY20 Target is no post incident post incident reviews post incident breaches of the PHSC reviews complete complete reviews complete FY20 Q3 report = no breaches

Key indicator

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4.4 Investment

Objective Performance Measure Performance Target

FY21 FY22 FY23

Financial Group EBITDA $16.1m $21.6m $26.4m performance FY20 Target $21.2m measures FY20 forecast = $20.3m

Underlying Net Profit After Tax $9.5m $12.0m $13.1m ('Underlying NPAT') FY20 Target $12.6 FY20 forecast = $13.6m

Group EBIT Return on Assets 1.8% 2.5% 2.8% FY20 Target $3.4% FY20 forecast = 3.6%

Underlying NPAT Return on Group 2.2% 2.8% 3.0% Equity FY20 Target 3.6% FY20 forecast = 3.7%

Gearing Ratio 0.7% 2.4% 7.5% FY20 Target is no borrowings FY20 forecast = no borrowings

Dividend $5.0m $6.0m $6.0m FY20 Target $5.0m FY20 forecast = $5.0m

Dividend Distribution as a percentage 52.6% 49.8% 45.8% of Underlying NPAT FY20 Target 39.8% FY20 forecast = 36.8%

Planning Base line Portfolio Investment Case Updated Portfolio Updated Portfolio Updated Portfolio supports the completed with Priorities Identified Investment Plan Investment Plan Investment Plan appropriate and and and continued regeneration implementation implementation of implementation of and growth of of critical Priority all Priority 1 and Priority 2 projects the port 1 and Priority 2 further progress on and projects. Priority Priority 2 projects. commencement of Projects as per Projects as per the Priority 3 projects. the Portfolio Portfolio Projects as per the Investment Plan Investment Plan Portfolio and SCI. and SCI. Investment Plan and SCI.

Infrastructure Complete works to enable MTOP MTOP Works for Current CPL House Log Hubs restoration and growth in logs (3M JAS) and Bluebridge, demolition and Expanded challenge containers (150k TEU), and minimise which utilises ground works current operational restrictions. former BNZ land complete complete and increasing port return of operational land. container rail onto port complete. Shed

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Objective Performance Measure Performance Target

FY21 FY22 FY23

39 complete and occupied by CPL staff.

Implementation of natural hazard Container Bomb Ground resilience Ground resilience resilience programme. This is carts operational, works to Aotea works to Aotea developed to mitigate business ground resilience Quay 3 complete Quay 2 complete continuity risks and provide works to non- which mitigates which mitigates incremental resilience improvement secured section log business and commenced of container continuity risk. to the Southern berth complete. Seawall.

Key project milestones completed Commenced A minimum of Log Yard major project 250m (from Regeneration, works on current 125m) of including revised provision of full container berth stormwater capacity operational. consent container berth commenced. and Seaview Seaveiw Wharf Wharf Renewal. Renewal - Main Wharf Head Works Complete providing IL4. A description of the key terms used in the financial performance targets is included in appendix 1.

Key indicator

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4.5 Stakeholders & Community

Objective Performance Performance Target Measure FY21 FY22 FY23

Building Targeted Face-to-face meetings Face-to-face meetings Face-to-face meetings awareness of engagement with key with key with key the value and with key stakeholders/influencers stakeholders/influencers stakeholders/influencers contribution of stakeholders CentrePort's directly and via Regular stakeholder Regular stakeholder Regular stakeholder activities to the digital channels updates via digital updates via digital updates via digital regional channels channels channels economy FY20 Q3 report = The CEO has held regular meetings with a range of stakeholders including central/local government representatives, and customers

CentrePort Community engagement Community engagement Community engagement Community supports and partnerships across partnerships across partnerships across integration participates in economic, community economic, community economic, community community and environmental and environmental and environmental initiatives programmes programmes programmes FY20 Q3 = community supported via sponsorship

Consulting Engage Regeneration Plan Engagement with Engagement with employees, stakeholders / engagement plan stakeholders as per stakeholders as per stakeholders community on finalised and Regeneration Plan and Regeneration Plan and and the Regeneration implemented engagement plan engagement plan community, as Plan appropriate FY20 Q3 = Stakeholder engagement plan being finalised

Environmental At least 3 per annum At least 3 per annum At least 3 per annum Engage with Consultative stakeholders on Committee environmental meeting matters frequency FY20 YTD = 1

Iwi relationships We are currently Confirm meeting Meetings with mana exploring with mana framework with mana whenua, and FY20 Q3 = CE whenua iwi the basis of whenua, and explore the incorporating tikanga level a long term relationship. ability to reflect tikanga Maori in our Board engagement Through this process we appointments

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Objective Performance Performance Target Measure FY21 FY22 FY23

with Taranaki will identify together how Maori in our Board Whanui occuring we will engage on an appointments in April. ongoing basis Engagement with Ngati Toa planned for Q4.

Strengthen Strategy At least 2 meetings per At least 2 meetings per At least 2 meetings per relationships by meetings with annum to discuss key annum to discuss key annum to discuss key working CentrePort’s strategic issues including strategic issues strategic issues collaboratively Board and Port the regeneration of including the including the with key Investments CentrePort, and key regeneration of regeneration of stakeholders Ltd’s Board decisions under CentrePort, and key CentrePort, and key CentrePort's Constitution decisions under decisions under CentrePort's Constitution CentrePort's Constitution

Key indicator

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5 GOVERNANCE The Board currently comprises six Directors appointed by the Shareholders. No more than two directors can be members or employees of the Shareholding Local Authorities. Two Directors retire at each annual general meeting by rotation. Directors’ remuneration is reviewed annually and confirmed at the annual general meeting. The Board generally meets monthly and at other times as required. The Board undertakes regular assessments of its performance including the effectiveness of the board, assessment of the necessary skills and experience, and succession planning. Over the year Board assessments will be shared with Shareholders, and succession planning will be discussed with Shareholders. Before making an appointment of a new Director, the Board assesses the balance of skills, knowledge, experience and diversity of the Board. In light of this assessment the Board will draw up a description of the role and competencies needed with a view to appointing the best placed individual for the role. This Competency Matrix will continue to be shared with our Shareholders prior to making any recommendations for changes in the composition of the Board. It is a critical element in assessing any potential candidate's appropriateness for the role. The Shareholders have requested representation on the selection committee responsible for recommendations for Director roles. In consultation with the Chair of PIL, CPL is currently undertaking an independent review of the existing process to better understand alternatives to ensure better governance options. The Board has delegated some of its powers to Board Committees and other powers to the Chief Executive and senior executives. The terms of delegation are clearly documented. The Chief Executive Officer has in some cases formally delegated certain authorities to his direct reports and has established a formal process for the direct reports to sub-delegate certain authorities. There are three formally constituted committees: the Health, Safety and Environment Committee; Audit & Risk Committee; and the Remuneration Committee. These formally constituted committees can only make recommendations to the Board for the Board to confirm. Health, Safety and Environment Committee Purpose: to assist the Board in discharging its responsibilities with respect to Health, Safety and Environment practices of CentrePort Limited. Outcomes: Governance and compliance with Health, Safety and Environmental Legislation, Regional Council plans and internal policies and procedures Critically enquiring about, challenging, evaluating and assessing health, safety and environment related risks and exposures Alignment of action plans with officer and Director responsibilities, legislative requirements and company goals Director exposure and input to the action plans and implementation Encouraging the adoption of new systems and procedures as part of continuous improvement.

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Audit & Risk Committee Purpose: to provide oversight on company financial and legislative compliance practices, agree and monitor the action plans for the management of financial and non-financial risks. Outcomes: Alignment of action plans with officer and Director responsibilities, legislative requirements and company goals Director exposure and input to the action plans and implementation Governance of all company risks Obtain assurance from external auditors on the integrity of the annual financial report. Remuneration Committee Purpose: to assist the Board in the establishment of remuneration policies and practices for the Company and in discharging the Board’s responsibilities relative to remuneration setting and/or review of Directors, CEO and direct reports. The Directors Remuneration review follows a collective performance review of Director performance and uses data obtained from the annual Institute of Directors survey on Directors Remuneration. Following consideration of this, a recommendation is made to shareholders for approval at the company’s Annual General Meeting. Outcomes: Reviewing and ratifying the remuneration policies and practices of the Company overseeing the establishment of annual performance objectives and monitoring the completion of the performance and talent management process Setting and reviewing, as appropriate, the terms and conditions of the employment agreement, remuneration and performance for the Chief Executive Officer and direct reports

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6 RATIO OF SHAREHOLDERS FUNDS TO TOTAL ASSETS Shareholders’ Funds (or equity) is defined as the total issued capital plus the balance of undistributed profits and all revenue and capital reserves less any minority interests of the CentrePort Group. Total Assets comprises the carrying value of all assets recognised on the CentrePort Group balance sheet. The table below presents the forecast ratio of shareholders’ funds to total assets.

Measure SCI Forecast SCI Forecast SCI Forecast

FY21 FY22 FY23

Shareholders' Funds $m 435.4 438.8 444.6

Total Assets $m 527.6 568.3 630.0

Shareholders' Funds / Total Assets % 82.5% 77.2% 70.6%

7 ACCOUNTING POLICIES The detailed Accounting Policies of the Group are consistent with the legal requirements of the Companies Act 1993, the Financial Reporting Act 1993 and International Financial Reporting Standards (IFRS). The Group’s accounting policies are detailed in the most recent annual financial statements which may be found using the following web link: https://2019annualreport.centreport.co.nz/

8 DISTRIBUTION OF PROFITS TO SHAREHOLDERS The Board aims to balance the need to retain capital to fund regeneration of the port infrastructure with the obligation to pay dividends to the Company’s shareholders. CentrePort’s dividend policy provides for dividends to be between 40 percent and 60 percent of underlying net profit after tax (‘NPAT’). Underlying NPAT is the reported NPAT adjusted for the after tax effect of fair value movements in cash flow hedges and investment properties, and earthquake related items. In addition the target dividend pay-out ratio reflects free cash-flow after providing for capital expenditure plans and the Board’s gearing targets. The Company’s dividend policy is reviewed annually by the Directors after considering the circumstances as they may exist, the cash flows generated by the Company and the successful achievements of the commercial objectives of the Company. The dividend paid will be the maximum practicable amount payable consistent with the needs of the business and within the constraints imposed by the Directors’ obligations to act within their statutory duties. The Company will impute dividends to the extent that imputation credits are available.

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Dividends are normally paid to shareholders on or prior to: • 28 February - 1st interim dividend following consideration of the half-year interim results • 30 June - 2nd interim dividend after considering the financial year outlook • 30 September - final dividend following consideration of the final annual results

9 INFORMATION TO BE REPORTED The Company will report to the shareholders in accordance with statutory requirements and will provide to the shareholders: • an audited set of annual financial statements applying accounting polices consistent with IFRS within two months of balance date. The Directors will also report on: – a review of operations – a summary of achievements measured against key SCI performance targets; and – the maximum dividend (if any) recommended. • a half yearly report within two months of the half year balance date comprising: – An un-audited condensed set of financial statements applying accounting polices consistent with IFRS. – A brief report from the Directors on the Company's operations for the half year and the outlook for the second half year. • a quarterly report comprising a summary of financial performance for the quarter and progress against key SCI performance targets. • a high level financial overview of CentrePort compared to other Ports. The comparison will be completed biannually for listed Port companies, otherwise annually for non-listed Ports. • a draft Statement of Corporate Intent by 15 February, and a final Statement of Corporate Intent by the end of May before the start of the new financial year. • further financial information that meets shareholder expectations.

The Company will also provide shareholders with health and safety reporting comparing CentrePort with available benchmarking data from the Business Leaders’ Health & Safety Forum (https://www.zeroharm.org.nz/resources/benchmarking/). The following three lag measures will be reported: – Lost time injury frequency rate per 200,000 hours worked – Lost time injury severity rate per 200,000 hours worked – Total recordable injury frequency rate per 200,000 hours worked Board Performance Reporting • The Remuneration Committee is responsible for ensuring there is a formal process for annually assessing and reporting on the performance of the Board, the Board Chair and the Board Committees. • The objective of this review is to contribute to a process of continuous improvement in the Board’s execution of its responsibilities. • The Board evaluation process may change from year to year on the recommendation of the Remuneration Committee. It may not be appropriate to do a full independent Board evaluation

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every year, however a full independent evaluation will be completed, as a minimum, every second year. The next full independent Board evaluation is scheduled for Q1 FY 20/21. The Company will consult with the shareholders when developing strategy and will provide the shareholders with strategic updates. The Company will meet shareholders at least once a year for a strategic overview.

10 PROCEDURES FOR ACQUISITION OF SHARES The Company will only invest in the shares of another business when the shares acquired are considered by the Directors to bring added value to the business of the Company providing an acceptable return on the cost of capital employed, or will further the objectives set out herein of the business of the Company. The Company will consult with shareholders prior to any material departure from the objectives outlined in the SCI.

11 COMPENSATORY ACTIVITIES

CentrePort will seek compensation by agreement from Greater Wellington Regional Council and/or Horizons Regional Council or the appropriate local authority for: • Marine pollution control services; • Any other statutory function, duty or power which they may wish the Company to carry out on their behalf and which involves the supply of goods or services.

12 VALUE OF SHAREHOLDER INVESTMENT

The Board’s assessment of the commercial value of shareholders’ equity in the Company as at 31 December 2019 is $434 million. The Board’s assessment is based on the value of the Company’s net assets recognised in the financial statements at that time. The net asset value includes an assessment of the fair value of operational port land, investment property interests, and the historic cost less depreciation and adjusted for any impairment of the Company’s other assets.

13 OTHER AREAS CentrePort recognises the need to operate a ‘no surprises policy’ with its shareholders. CentrePort will hold Quarterly Meetings with the shareholders to discuss: • The overall and segmented performance of the Company, including progress measured against the then current Budget and the outlook for the current year; • The progress of the Company in meeting its financial, environmental and social performance targets; • The performance of the Company in optimising the operational effectiveness and value of its property portfolio;

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• Update on strategic direction, capital expenditure plans, debt position and dividend expectations; • Progress on the key initiatives of the Port Regeneration Plan milestones, the multimodal ferry terminal and planning for future use of the Company’s property portfolio; • Progress on the Company’s collaborative approach with key stakeholders; • Annually, providing comparative analysis measures with other ports including return on equity and gearing. • The Company will promptly advise the Shareholder on sensitive issues affecting the Company. The Company shall review its Strategy and Business Plan annually and present the key components of these documents to shareholders. It is expected over the next three months that the Company will present to Shareholders it’s intended investment strategy to regenerate the Port and will be seeking Shareholder approval at this time. The timetable to present the investment strategy will be affected by the development of a multi-user ferry terminal as this is a corner stone investment which has significant impacts across the entire Port. We will keep Shareholders updated on major projects and transactions over $30 million, per the Company’s constitution. CentrePort reports on the performance targets included in the SCI in its annual report. The Company engages with its shareholders and other stakeholders to set the performance targets each year as part of the SCI process. CentrePort is also closely monitoring the emergence of other non- financial reporting measures such as Integrated Reporting and will consider application of these measures in the future. The Company shall provide to the shareholders by February each year a Draft Statement of Corporate Intent for the consideration of shareholders to be finalised by 31 May each year.

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APPENDIX 1 FINANCIAL TARGET KEY TERMS A description of the key terms used in the financial performance targets is set out below: Underlying Net Profit After Tax (‘Underlying NPAT’) Underlying net profit after tax excludes (i) fair value movements, and (ii) earthquake items. Return on Assets Earnings before interest and tax (EBIT) divided by the average of total fixed assets, investments and cash balances. Return on Equity Underlying net profit after tax divided by average equity. Gearing Ratio Debt divided by the sum of Debt plus Equity (Shareholders Funds). Throughout this document references to FY are to Financial Years ended 30 June. For example, FY21 means financial year ended 30 June 2021.

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