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 1 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 re- appointment. 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.