2008 ChairpersonsReport.pub

Central Energy TrustPO Box 1242, Palmerston North 4440

32 Amesbury Street, Palmerston North 4410Ph (06) 358 4163Fax (06) 356 5196

www.centralenergytrust.org.nz

Central Energy Trust are proud to havesupported the Hilux New Zealand Rural

Games.

Photos to the right are from the2018 Hilux New Zealand Rural Games.

FOR THEYEAR ENDED

31 MARCH 2018

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

1

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

2

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.

CENTRAL ENERGY TRUST

3

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.

CENTRAL ENERGY TRUST

4

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

CENTRAL ENERGY TRUST

5

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.

Grants Criteria

CENTRAL ENERGY TRUST

6

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.

CENTRAL ENERGY TRUST

7

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.

Year Trust

Capital Accumulated

Income Total Trust

Funds

Growth in Trust Funds

Allocations Made

Return including

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

CENTRAL ENERGY TRUST

8

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

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

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 provision for grants

$3,703,876 $26,284

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

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 and provision for Grants

3,703,876 26,284

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 forward

7,182,125 8,623,935

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 at end of year

$7,013,088 $7,182,125

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

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

12

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.

13

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

14

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 Club

-

12,000

12,000

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 Netball Club

1,975

-

1,975

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 Festival of Cultures)

-

15,000

15,000

Lancewood Event Management (2018 Esplanade Day)

7,000

-

7,000

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 (Annual A & P Show)

-

4,022

4,022

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 2016)

4,000

-

4,000

15

FOR THE YEAR ENDED 31 MARCH 2018 (2) GRANTS APPROVED

Approved Approved and paid not paid Total $ $ $ Manawatu Sports Foundation (SPOTY 2017)

-

24,000

24,000

Manawatu Summer Shakespeare (School of English & Media Studies 2018)

-

5,000

5,000

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 Railway Inc

10,911

14,509

25,420

Palmerston North Girls High School - 75,000 75,000 Palmerston North Methodist Social Services

3,477

-

3,477

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 Trust

1,288

-

1,288

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 Upgrade

-

175,000

175,000

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

16

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) 2016-2017

11,807

EECA Healthy Homes (Manawatu Healthy Homes) 2016-2017

102,267

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 and not paid

$1,558,242

Total grants approved, not paid as at 31 March 2018

$3,307,542

Notes to the Financial Statements

17

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 as at 31 March

$3,307,542

$2,604,703

(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

18

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

19

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.

20

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

21

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

22

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

Notes to the Financial Statements