Christchurch City Holdings Limited Christchurch City Holdings is a wholly-owned subsidiary of cchl Christchurch City Council. annual report2015 . ORION CHRISTCHURCH AIRPORT LYTTELTON PORT COMPANY ENABLE SERVICES CITY CARE RED BUS ECOCENTRAL C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 5 A N N U A L R E P O R T 2015 snapshot $1.1 $46.0 6,000 work on the billion million Christchurch airport the capital and the dividend campus dividend payments CCHL paid to The largest employment site CCHL has made Christchurch City in the South Island. to the Council Council since 1995 for the 2015 year. Allowing major investments in community assets, while reducing the impact on rates. 10 times 3.8 increase in container million 2 million numbers through New Zealanders Lyttelton Port Red Bus trips serviced by City Care over the past 30 years. during the year and beyond 2The CCHL0 group 1has grown5 significantly in value over the years, and the Council is in the position of owning a valuable portfolio of trading assets. We will work proactively with the Council in implementing its capital release programme over the next few years. seven the number of subsidiary 191,000 companies that the number of make up CCHL Orion, Christchurch Airport, homes & businesses Lyttelton Port Company, to which Orion Enable Services, City Care, Red Bus and EcoCentral. distributes power 86,500 the number of homes, businesses, 97,620 schools & healthcare tonnes of material facilities that can diverted from now access fibre landfill by EcoCentral broadband services the rebuild The CCHL group continues to play a vital role in the rebuild of Christchurch and Canterbury following the series of earthquakes that struck the region in 2010 and 2011. CCHL remains ready to assist its 100% shareholder Christchurch City Council as it addresses the multitude of challenges in rebuilding Christchurch. C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 5 A N N U A L R E P O R T Contents The CCHL group 02 About CCHL 03 The CCHL group subsidiaries 04 08 Chairman’s report 12 Financial overview 15 Corporate governance statement CCHL board of directors 17 Subsidiary and associated companies: 18 18 Orion New Zealand Ltd 20 Christchurch International Airport Ltd 22 Lyttelton Port Company Ltd 24 Enable Services Ltd 26 City Care Ltd 1 28 Red Bus Ltd 30 EcoCentral Ltd 32 Monitored entities: 32 Canterbury Development Corporation Financial statements 34 100 Statutory information Independent auditor’s report 102 104 10 year summary Directory and group contacts 105 Photo courtesy www.rsphotos.co.nz C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 5 A N N U A L R E P O R T THE CCHL Group 75% 100% Christchurch Lyttelton Port International Airport Ltd Company Ltd % % 89.3 ▲ ▲ 100 Orion Enable New Zealand Ltd Services Ltd 100% ▲ ▲ Christchurch City Holdings Ltd Enable Networks Ltd Connetics Ltd 100% INFRASTRUCTURE Associate cChristchurchc Cityh Holdingsl is the commercial and investment arm of % Canterbury 100 ▲ ▲ Development 2 City Care Ltd Corporation ▲ CONTRACTING ▲ MONITORING ROLE MONITORING 100% 100% Red Bus Ltd EcoCentral Ltd C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 5 A N N U A L R E P O R T ABOUT CCHL Christchurch City Holdings Ltd (CCHL) is the commercial and investment arm of Christchurch City Council (the Council). The company is responsible for managing the Council’s investment in seven fully or partly-owned trading companies – Orion New Zealand Ltd, Christchurch International Airport Ltd, Lyttelton Port Company Ltd, Enable Services Ltd, City Care Ltd, Red Bus Ltd and EcoCentral Ltd. CCHL also monitors the Canterbury Development Corporation on behalf of the Council. CCHL’s key purpose is to invest in Financial contribution Independent governance of and promote the establishment Christchurch City Council’s decision in trading companies of key infrastructure and this now 1993 to retain its key infrastructural One reason for such a strong growth extends to assisting the Council in assets through the establishment and return rate is the independent the rebuild and redevelopment of of CCHL has created a successful and commercial approach taken by Christchurch following the Canterbury public ownership model. The model the boards and management of the earthquakes, and to working with has enabled CCHL to make over trading companies. the Council to implement its capital $1.1 billion of capital and dividend CCHL places a great deal of emphasis release programme as outlined in its payments to the Council since on ensuring the group has first class Long Term Plan. Provisionally, this 1995, allowing major investments in governance processes in place. involves the release of up to $750m community assets, while reducing Through a structured, independent of capital from CCHL over the next the impact on rates from such process, CCHL recommends director three years through a combination of investments. appointments to subsidiary companies restructuring and asset sales. Over the same period, the asset value and monitors those companies on of CCHL through its trading companies behalf of the Council. Further detail 3 has grown from some $400m to regarding the company’s corporate $3.3bn. Total group equity has risen governance polices is set out on from $261m in 1995 to over $1.9bn page 15. today (of which $1.6bn is attributable to Christchurch City Council as the Accountability to the Council 100% shareholder of CCHL). CCHL is accountable to the Council through a number of mechanisms, CCHL’s ordinary dividend to the including: Council for the 2016 year is forecast at $46.0m, plus the return of any • Approval of CCHL’s annual restructuring or sale proceeds, Statement of Intent; potentially amounting to $200m. • Council appointment of CCHL directors (four councillors and four external); • Confirmation of director appointments to subsidiary companies; • Periodic reporting to the Council; and • Publication of half year and annual CCHL’s key reports. purpose is to invest in and promote the establishment of key infrastructure. C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 5 A N N U A L R E P O R T THE CCHL Group subsidiaries The recently commissioned Waimakariri substation 66kV switch room, built to reinforce Singapore Airlines and the airport celebrated the power network in northern Christchurch. 50 years of Singapore’s independence. 89.3% 75% Orion New Zealand Ltd Christchurch International Airport Ltd Value in CCHL’s Value in CCHL’s balance sheet balance sheet $753 $635 MILLION MILLION 4 Orion owns and operates the electricity distribution Christchurch Airport is the natural gateway to the South network that provides power to around 191,000 homes and Island, which has long been the engine room of New businesses. Orion aims to provide a safe, resilient, reliable Zealand’s international tourism industry. It is the busiest and and cost effective electricity distribution network. most strategic southern air connection to the world's trade and tourism markets, with more than 75,000 commercial As one of the largest electricity distributors in New Zealand, aircraft movements and 5.93m passengers welcomed in the Orion’s network covers remote rural areas, regional towns past year. and the city of Christchurch. Its network traverses 8,000 square kilometres between the Waimakariri and Rakaia The airport is a major driver of the South Island regional rivers and from the Canterbury coast to Arthur’s Pass. economy and of regional economic development, with some 6000 personnel working on the airport campus in passenger, Electricity retailers pay Orion for the network delivery freight, export and logistics related businesses, making it the service and include this in their retail charges to homes and largest single site of employment in the South Island. businesses. The South Island visitor economy employs approximately Around 190 employees work directly for Orion, and most 63,000 full-time equivalent workers. days a further 300 contractors work on the network. All of these people are critical to Orion’s business as they plan, engineer, operate and control the network, manage finances and contracts, and give customers the best service they can. Orion owns Connetics – an electrical contracting service provider to utility network operators, local authorities, developers and commercial/industrial customers. C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 5 A N N U A L R E P O R T Lyttelton Port as seen from the village. Connecting a home to fibre broadband. 100% 100% Lyttelton Port Company Ltd Enable Services Ltd Value in CCHL’s Value in CCHL’s balance sheet balance sheet $459 $86 MILLION MILLION 5 Lyttelton Port of Christchurch (LPC) is the South Island’s Enable Services Ltd (ESL) is an investor in a fibre broadband biggest port and the third largest container terminal in network that is transforming how people in greater New Zealand.