Auckland Council Investments Limited (ACIL)

39 Pages·2015·4.8 MB·English

0
2
0
5
C
B
Auckland Council
Investments Limited
Annual Report for year ended 30 June 2015
Contents
Chairman and Chief Executive’s review 4

Statutory information 13

Consolidated Financial Statements
and Statement of Service Performance 15
2 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 3
Chairman’s and Chief Executive’s review
Auckland Council Investments Limited (ACIL) completed Performance overview
its fourth year as steward of Auckland Council’s strategic
equity investments with continued growth and another ACIL’s surplus after tax for the year was $110.7m,
strong financial performance. compared to $104.9m in 2014. The company paid a
dividend to Auckland Council of $75.6m ($156m in 2014
During the year the changes arising from the 2014
which included $101.5m arising from a return of capital
Council review of Council Controlled Organisations were
by AIAL), equivalent to 5.1% of Council’s rates revenue.
implemented.
ACIL’s return on equity in 2015 was 12.3% compared to
Planning is underway for a slimmed-down ACIL –
26.5% in 2014.
arising from the Review – which will take the company
forward from October 2015. The major change was All entities traded profitably with continued strong
that management of the Council’s Diversified Financial performances from Ports of Auckland (POAL), Auckland
Assets Portfolio (DFA) was transferred from ACIL International Airport Limited (AIAL) and Auckland Film
management to Auckland Council Treasury management Studios Limited (AFSL).
on 1 March 2015.
4 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 5
Ports of Auckland
New Zealand’s most significant trading gateway, Ports commercial considerations of POAL with the concerns
of Auckland (POAL), continued to perform strongly in of all stakeholders and the long-term strategic needs
2015, a year that also highlighted capacity constraints of the region for a port which can meet the demand
at the port, and saw the commissioning of the Port from importers and exporters. The Port Future study will
Future Study by Auckland Council that will be critical to assess the future strategic options for the location of the
the future economic development of the city and the Port. Its recommendations to Auckland Council in June
port company. 2016 about the long-term strategy for the provision of
port facilities for imports and exports will be critical.
POAL achieved a surplus after tax of $71.7m on turnover
of $218.3m compared to $74m last year. It paid a The competing interests highlighted by the proposed
dividend of $54.7m to ACIL, (2014, $51m). POAL Bledisloe Wharf extensions brought into stark focus the
continues to make acceptable returns on equity, up from findings of the NZIER report, commissioned by Auckland
returns historically of around 6%. Council, which identified that Ports of Auckland faces
capacity constraints with respect to general cargo, which
Highlights of the year included the conclusion of a
the proposed Bledisloe Wharf extensions sought to
collective agreement with the Maritime Union of New
address. The report found that container operations were
Zealand, drawing a line under a prolonged period of
likely to meet constraints between 2024 and 2035. The
industrial unrest at the port, and completing progress
report stated: “Ultimately POAL will either lose business
towards a much more productive operation.
or need more land, structures or berth-capacity to allow
Experienced director and former Port of Tauranga chief for future demand.” The immediate need is for berth
executive Jon Mayson was appointed to the POAL board capacity as productivity improvements deferred the need
in October 2014. Subsequent to year-end, chairman for additional reclamation.
Graeme Hawkins who had signalled his retirement some
Around 34% of New Zealand’s container movements are
months earlier, retired and Deputy Chairman Rodger
handled by Ports of Auckland. In terms of labour, ship
Fisher became acting chairman.
and vessel productivity, POAL is the most productive
Mr Hawkins made a significant contribution to the port in Australasia and a very valuable asset for all
improvement in the port company’s performance, since Aucklanders and the region.
joining the board in 2009.
The strategic alignment of Kotahi, Maersk and Port of
ACIL worked with both POAL and Auckland Council Tauranga has the ability to significantly adversely affect
during the period of public protest about the proposed the profitability of POAL. However the establishment of
Bledisloe Wharf extensions, and the striking down by the joint venture, Nexus Logistics Limited has potential
the High Court of the resource consents granted by to lower supply chain costs and improve the profitability
Auckland Council last year. We sought to balance the of the company even further.
6 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 7
Auckland International Airport Limited
AIAL continued its strong performance during the year In 2015, AIAL’s share price increased from $3.90 to
under review. ACIL’s share of its profit was $52m. A $4.94, valuing ACIL’s stake in the company, on behalf of
dividend of $38.1m was paid to the ACIL group. Auckland Council, at $1.3 billion.
Not only does Auckland have New Zealand’s largest Like our port, our international airport is performing
maritime gateway in Ports of Auckland, its airport at the very top level internationally. At the 2015
connects us to the rest of New Zealand and the world. SKYTRAX World Airport Awards it won best airport in
the Australia/Pacific region for the seventh year in a row,
Passenger numbers through Auckland Airport
third best airport in the world serving 10 to 20 million
grew 5% to 15.8m, with international passengers
passengers and fifteenth best airport in the world overall.
increasing 5.7% to 8.1m.
8 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 9
FP_POSTER_FINAL.pdf 1 8/28/13 9:38 AM
Auckland Film Studios Limited
Auckland is becoming ever more attractive to film and The company is awaiting Auckland Council’s decision
television producers in New Zealand and around the on a proposal to redeploy its Marine Industry Precinct
world. The international competitiveness being driven site at Hobsonville Point as a film industry centre. This
by both the government incentives and a competitive may have an impact on future site development at the
exchange rate. current premises.
Auckland Film Studios Limited (AFSL) attracted a The film and television work undertaken at AFSL this
number of prestigious projects during the year, and in year included the prequel to the highly successful
achieving 97% occupancy, made its highest profit under Hollywood movie, “Crouching Tiger, Hidden Dragon” and
ACIL’s ownership. MTV’s “Shannara” – a new series scheduled for release in
January 2016 based on Terry Brooks’ best-selling fantasy
AFSL made a surplus after tax of $4.3m, compared to
books ‘The Shannara Chronicles”.
$0.7m in 2014, a solid performance. Excluding insurance
proceeds and revaluation of the property, the surplus for During the year, Julian Grimmond resigned from
the year was $1.4m. It returned a dividend of $99,275. the AFSL board due to other commitments, and his
experience and skills will be missed. ACIL is grateful for
This progress was made despite setbacks. In late July a
his contribution to AFSL over a number of years.
fire partially destroyed two studios at its Henderson site.
C
M
Y
CM
MY
CY
CMY
K
10 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 11
Diversified Financial Assets Portfolio Dividends and distributions paid since Statutory information
ACIL was established
In March 2015, management of this portfolio was
transferred to Auckland Council in line with the
recommendations from the CCO review. In the eight Distributions Section 140 of the Companies Act 1993 requires a Director to disclose that he or she is interested in a transaction
Dividends paid
months to 28 February, the portfolio produced a return from the DFAP or proposed transaction with the company forthwith after becoming aware of that. A general notice entered in the
$M
of 11.1%. $M Interests Register and disclosed to the Board that a Director is a shareholder, director, officer or trustee of another
named company or person and is to be regarded as interested in any transaction with that company or person is
2011 13.3 0.0
sufficient disclosure of that interest.
The journey thus far
2012 30.0 0.0
Current disclosures in relation to the Companies Act 1993 are:
2013 45.0 24.0
In what is the final year of ACIL as originally established,
it is worth looking back on the company’s first four and a
2014 156.0 25.5 Name of Director having interest Section 140C Companies Act 1993 disclosures
half years.
2015 75.6 0.03
Chairman: Airport Shares (Auckland) Limited, Airport Shares (Manukau)
ACIL’s assets have increased in value by $1.2b to
Limited, Crown Fibre Holdings Limited, St Cuthbert’s College, NZ
$2.4 billion (93% increase) since it took on the 319.9 49.5
Refining Company Limited
management of its portfolio of Auckland Council assets.
Simon Allen
Appreciation and thanks Director: Snowvision Limited, Xylem Investments Limited
We have paid out $319.9m in dividends and $49.5m
in distributions from the DFAP to Auckland Council, Member: NZ Film Commission Significant Economic Benefits Verifcation
equivalent to 5.7% of rating revenue over that time. The reduction in activities as a result of the transfer of Panel
the DFAP will result in Gary retiring from the position
The value of the POAL shares has increased by $450m to of Chief Executive on 30 September and being replaced Chairman/Shareholder: Corban Consultants Limited, Corban Mulcaster
$1.1 billion (73% increase). by a part-time chief executive. We are delighted that Vineyard Limited, Lindsay Corban Associates Limited, Ngatarawa Wines
The value of ACIL’s shares in AIAL has grown by $693m John Crawford, a former Deputy Secretary, Commercial Limited
to $1.3 billion (112% increase). Transactions at the Treasury has accepted this role. The Consultant: Baldwins Intellectual Property, Baldwins Law, Corban Revell
five member board retires on 31 October, to be replaced
The DFAP increased in value by $85m to $345millon Lawyers, Church of Melanesia Interim Management Board
by a three member board, one of the decisions arising
(33% increase) over the period of ACIL’s management. from the CCO review. Chairman: Corban Estate Arts Centre, Graham Dingle Foundation,
Brian Corban CNZM, QSO Melanesian Mission Trust Board, Royal New Zealand Navy Museum,
May we take this opportunity to thank the ACIL team,
West Auckland Trust Services Limited
Assessed value of the investments:
the directors that have served over the past five years,
as well as the boards and management of POAL, AIAL, Patron: Falls Hotel Preservation Trust, Henderson Heritage Trust,
and AFSL, and our DFA fund manager partners for their Waitakere City Brass Band
Value Value Value
support during what has been an extremely productive
1 Nov 30 Jun 30 Jun Trustee: West Auckland Hospice Foundation Trust
2010 2014 2015 and profitable period for the company.
Member: Auckland Museum Council, Committee for Auckland, New
$m $m $m
In addition, we extend our thanks to Auckland Council
Zealand Advisory Council – Church of Melanesia
and its leadership team for their support and for a
POAL 623 1,079 1,0791
constructive working relationship to improve returns Chair: Cognition Education Trust Limited, Royal New Zealand Ballet
AIAL 621 1,039 1,314 from these assets to the benefit of Aucklanders. Candis Craven ONZM Director: Auckland Regional Amenities Funding Board
AFSL 3 10 10 There is no doubt that ACIL’s success demonstrates the Managing Director: Niger Holdings Limited
significant benefits that the CCO model has delivered
Owned by ACIL 1,247 2,128 2,403 Chair: Banking Ombudsman Scheme, Legal Aid Advisory Board to the
for Auckland, a factor in the decision by Council to retain
Ministry of Justice, NZ on Air
DFAP 260 311 3452 the current structure. We wish the new board and chief
executive well as they take the company forward. Miriam Dean CNZM, QC Director: Airport Shares (Auckland) Limited, Airport Shares (Manukau)
Total owned
Limited, Crown Fibre Holdings Limited
and managed by 1,507 2,439 2,748
ACIL Trustee: Royal New Zealand Ballet
Director: Aotearoa Credit Union, Greater Auckland Netball Limited,
Manawanui In Charge, Ngati Porou Holding Company, Netball Northern
Diana Puketapu
Zone, Public Trust, World Masters Games 2017 Limited
Member: NZ Olympic Committee
Simon Allen Gary Swift
Chairman Chief Exectuive
¹ Not independently valued in 2015.
² Value at 28 February 2015
3 There were no distributions from the DFAP prior to the transfer of its management to Council on 1 March 2015.
12 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 13
Auckland Council Investments Limited
Consolidated financial statements
for year ended 30 June 2015
Auckland Council
Investments Limited
Consolidated
Financial Statements
and Statement of
Service Performance
for year ended 30 June 2015
14 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 Auckland Council Investments Limited Annual Report for year ended 30 June 2015 15
Auckland Council Investments Limited
Directors' report
30 June 2015
Contents
Directors' report
Page
The Board of Directors have pleasure in presenting the annual report of Auckland Council Investments Limited,
Directors' report 2
incorporating the consolidated financial statements and the auditor's report, for the year ended 30 June 2015.
Auditor's report 3
Consolidated financial statements
The Board of Directors of Auckland Council Investments Limited authorised these consolidated financial statements
Consolidated statement of comprehensive revenue and expense 5
presented on pages 5 to 58 for issue on 9 September 2015.
Consolidated statement of changes in equity 6
Consolidated statement of financial position 7
For and on behalf of the Board.
Consolidated statement of cash flows 8
Notes to the consolidated financial statements
1 General information 9
2 Summary of significant accounting policies 10
3 Critical accounting estimates and judgements 22
4 Service and other revenue 22
5 Finance expense 23
6 Other gains 23
7 Personnel 23
8 Other 23
9 Income tax expense 24 Director Director
10 Imputation credit account 25
11 Cash and cash equivalents 25
12 Receivables 25
13 Inventories 26
14 Investment properties 27
15 Equity accounted investments 28
16 Property, plant and equipment 31
17 Intangible assets 34
18 Investments in subsidiaries 35
19 Available-for-sale financial assets 35
20 Payables 36
21 Employee entitlements 36
22 Derivative financial instruments 36
23 Borrowings 38
24 Deferred tax liabilities 39
25 Provisions 41
26 Contributed equity 41
27 Reserves and accumulated funds 42
28 Dividends 43
29 Capital commitments and operating lease commitments 43
30 Reconciliation of net surplus after tax to net cash inflow from operating activities 44
31 Contingent assets and liabilities 45
32 Related party transactions 45
33 Remuneration 47
34 Business combinations 48
35 Events occurring after the balance date 49
36 Financial risk management 49
37 Capital management 55
38 Continuity and support 55
Statement of service performance 56
1 2
This audit report relates to the consolidated financial statements of Auckland Council Investments Limited for the year ended 30 June 2015
included on Auckland Council Investments Limited’s website. The Company’s Board of Directors is responsible for the maintenance and
integrity of the company’s website. We have not been engaged to report on the integrity of the company’s website. We accept no responsibility
for any changes that may have occurred to the consolidated financial statements since they were initially presented on the website. The audit
report refers only to the consolidated financial statements named above. It does not provide an opinion on any other information which may
have been hyperlinked to/from these consolidated financial statements. If readers of this report are concerned with the inherent risks arising
from electronic data communication they should refer to the published hard copy of the audited consolidated financial statements and related
audit report dated 9 September 2015 to confirm the information included in the audited consolidated financial statements presented on this
website. Legislation in New Zealand governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
4